Average House Prices Have Fallen by 41.4% Since 2007

Real estate appraisal company, Tinsa, reported earlier this week that average house prices in Spain registered a decline of 2.8% year-on-year in March, compared with a decline of 3.6% registered the previous month, and has now accumulated a decline of 41.4% since the maximum values reached in December 2007, before the start of the crisis.

Thus, the price of housing has accumulated a year-on-year fall of 0.4% in the first three months of the year, moderating by two-tenths the decline registered in the same period of 2014, of 0.6%. According to Tinsa, the current price level is similar to that of the summer of 2003.

With reference to the areas analysed by Tinsa, El Economista reported that the biggest year-on-year declines in prices were registered in the Metropolitan Areas (-5.3%) and for the smaller towns that are included in the ‘Other Municipalities’ category (-3.8%).

In the Capitals and Large Cities, the price of housing fell by 2.1% in March, year-on-year, while the Balearic and Canary Islands registered a decline of 1.7%. Only the Mediterranean Coast registered an increase in prices in the third month of the year,  with a rise of 0.2% compared to March 2014.

Since the peak levels reached in 2007, average house prices have fallen by 48.7% in the Mediterranean Coast, by 45.4% in the Metropolitan Areas, by 44.9% in the Capitals and Large Cities, by 35.1% in the Other Municipalities and by 32% in the Balearic and Canary Islands.

For Tinsa, the March data confirms the price stabilisation process initiated in the second half of 2013, although they believe it is still “premature” to say that it has already bottomed out. In their opinion, the evolution of these prices will depend very much on the progress of the economy and employment, but they stressed that if the forecasts announced in recent months of increased economic growth come to fruition, then the reactivation of housing transactions will  be confirmed and the average house prices could bottom out in the coming months.