House Prices in Q3 Register First Quarterly Increase Since 2010

December 23rd, 2013

inflationThe National Statistics Institute reported last week that private housing prices rose by 0.7% in the third quarter of the year, over the previous quarter, recording their first quarterly increase since the second quarter of 2010.

Thus, the housing prices return to positive rates after 12 quarters registering quarterly declines. In the second quarter of this year, the fall in housing prices moderated by almost six points, registering a decline of -0.8% compared to -6.6% in the first quarter.

Both new and used housing prices returned to positive growth rates in the third quarter over the previous quarter. In particular, prices of resale housing rose by 0.1%, while new housing increased by 2.3% over the second quarter.

Year-on-year (third quarter of 2013 over the same quarter of 2012), the decline in the price of private housing eased by over four points, falling by 7.9%, the smallest decline since the third quarter of 2011.

The price of new homes moderated their decline by almost five points in the third quarter, year-on-year, falling by 7.9% compared to -12.7% in the second quarter, while the price of used homes fell by 8% year-on-year, compared with a fall of 12.1% in the previous quarter.

El Economista reported that there have now been 22 consecutive quarters in which the prices of private housing have registered negative annual rates. Housing prices have continued to fall since the second quarter of 2008 (when they fell by -0.3%) although they have now started to show signs of moderation.

All regions recorded negative annual rates in the third quarter, although more moderate than in the previous quarter. The largest percentage rate increases in house prices, year-on-year, occurred in Galicia and Cantabria, rising by 5.9 and 5.8 points, to rates of -7.1% and -5.4% respectively.

In the third quarter, the regions which registered the steepest declines in prices year-on-year were Murcia (-15%), Extremadura (-14%) and Castilla-La Mancha (-12.9%), while the lowest declines were registered in the Basque Country (-5%) and Cantabria (-5.4%).

Quarter-on-quarter, the price of private housing registered growth in ten regions, with the largest increases being in the Balearic Islands (+2%) and Valencia (+1.8%), and the largest decreases were registered in Navarra (-1.3%), Asturias (-1.2%) and Extremadura (-1%).

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