Fictitious Spanish Property Prices
January 2nd, 2009
Download the latest Kyero.com Spanish House Price Index. Updated with the latest analysis of average asking prices for Q4 2008, it shows Spanish house price trends from mid 2007.
Comparing the average asking prices of Q4 2007 and Q4 2008, many vendors and estate agents continue to price properties optimistically.
Although double-digit price decreases have been observed in six of the provinces measured, most Spanish property vendors seem intent on maintaining a fictitious asking price – presumably to leave room for haggling.
Overall, the average asking price in Spain fell by 0.3% over the past 12 months, yet 10 provinces recorded a price increase – some as hefty as 17%.
Whilst the reasoning behind adopting this kind of pricing is questionable, these statistics are consistent with the figures published by the Ministry of Housing and the Institute of National Statistics for Q3 of 2008.
The figures from the Ministry are based on property valuations rather than sales and are therefore subject to the whim of the assessor and the motive for the property valuation. Their Q3 2008 figures show a slight increase in the national average price of property in Spain.
The National Institute of Statistics uses actual notarised sales to publish their figures – which demonstrate a 3% annual decrease by Q3 2008. However, even these figures must be taken with a pinch of salt because they do not account for the still-common practise of conducting part of the property transaction in cash.
Whether it’s notarised prices, property valuations or asking prices, each set of numbers hides the scope of the downturn in Spanish property prices. Personally, I believe that this lack of transparency is one of the fundamental causes of the property crisis in Spain – not a symptom of it.
Property vendors and their agents have the power to kick-start property sales by pricing properties to sell and being prepared to demonstrate an actual and significant reduction in their asking prices. Instead of asking vendors what sales price they want, estate agents in Spain can now drive the sales process by advising their clients of a realistic asking price – one which will attract buyers.
This week, I noticed the same property being promoted by a handful of agents between 385,000 euros and 280,000 euros. I also heard of a property sale where the price had genuinely been reduced to 3 million euros from over 4 million. Spanish properties are selling when the price is right.
In lieu of consistent and realistic property pricing in Spain, and in the absence of reliable price data, my advice to buyers is to completely ignore the asking price and make a cheeky offer. This is the most productive strategy until vendors and agents price properties to sell, or a reliable set of house price data becomes available.
As a guide, consult the Kyero.com house price index for the area you are interested in – and start making offers at 30% below that level. What’s the worst that can happen?
Martin Dell, Kyero.com
| Comparison of Q4 2007 & 2008 asking prices | |||
| Province | Q4 2007 / €000′s | Q4 2008 / €000′s | 2007/2008 Change |
| Teruel | 190.7 | 124.5 | -34.7% |
| Fuerteventura | 216.4 | 158.7 | -26.7% |
| Lugo | 151.1 | 127.5 | -15.6% |
| Sevilla | 172.6 | 146.0 | -15.4% |
| Tarragona | 235.8 | 200.2 | -15.1% |
| Huelva | 256.9 | 229.0 | -10.9% |
| Cordoba | 144.3 | 130.1 | -9.9% |
| Barcelona | 621.3 | 563.0 | -9.4% |
| Castellon | 244.2 | 224.0 | -8.3% |
| Caceres | 129.5 | 119.8 | -7.5% |
| Gran Canaria | 222.6 | 206.4 | -7.3% |
| Valencia | 225.3 | 212.9 | -5.5% |
| Murcia | 213.4 | 201.7 | -5.5% |
| Badajoz | 89.6 | 85.8 | -4.3% |
| Lanzarote | 253.1 | 243.3 | -3.9% |
| Almeria | 199.0 | 193.9 | -2.5% |
| Alicante | 250.0 | 245.6 | -1.8% |
| Huesca | 285.3 | 280.8 | -1.6% |
| Jaen | 96.2 | 94.7 | -1.6% |
| Spain | 248.0 | 247.3 | -0.3% |
| Granada | 170.0 | 170.9 | +0.5% |
| Malaga | 307.8 | 311.0 | +1.0% |
| Tenerife | 220.6 | 223.5 | +1.3% |
| Coruna | 180.1 | 183.1 | +1.7% |
| Girona | 475.6 | 490.3 | +3.1% |
| Asturias | 161.0 | 176.7 | +9.8% |
| Albacete | 146.7 | 161.8 | +10.3% |
| Pontevedra | 269.6 | 300.8 | +11.6% |
| Mallorca | 448.8 | 526.7 | +17.3% |
| Cadiz | 272.6 | 319.9 | +17.4% |
Related Posts
- October 2008: Spanish Property Prices Drop 6.5% YoY
- Spanish Property Prices Fall by 1.3% Q3 2008
- Property Sales Prices in Spain
