TINSA monthly house price report for Spain.

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Who are TINSA

TINSA IS are one of the major valuation companies used by Spanish Banks when evaluating property in Spain for the purpose of a mortgage publish each month a report on average price per square meter.

The report uses 2004 as a base and tracks the average price per meter square over the last 10 years. The data is taken from a selection of formal valuations undertaken in the month across the whole Spain.

The report is broken down into Capital Cities, Metropolitan areas, the Costas, the Islands and the rest of the municipalities. The information is therefore of a very general basis as it does not pick out hotspots or areas of extreme crisis but it does give an indication of trends over a long period of time.

According to the Banks valuation companies what is happening to property prices in Spain

The year of 2014 remains below that of 2013 indicating that prices are still falling. The key difference in the month of May to other months in 2014 is that finally on a month by month basis within the year prices per square meter are creeping up.

Across the whole of Spain price per square meter increased from the April level of € 1367 to € 1371. The highest increase of € 33 per mtr square was seen in the Costas and second highest in the Cities. Both are traditional nonresident haunts, reflecting what we are seeing at grass root level which is a noticeable upturn in the number of foreign buyers applying for mortgages in these areas.

Converse to this the Islands which are not broken down into the Balearics or the Canaries but lumped together showed a slight decrease in price per meter square from April to May. The Islands across the last 10 years however has held up better than most of Spain, neither rising as much during the boom years nor falling as much during the crisis.

Are property prices recovering

All the information being generated by the various statistical offices in Spain indicates we are close to the bottom of the curve in terms of pricing, in the areas most attractive to international buyers, and in the highly populated Cities of Madrid and Barcelona. There is less evidence that across other parts of Spain, who do not benefit from an international market or commerce that a recovery is as yet underway.

With mortgage credit and loans becoming more readily available for residents and non residents of Spain and the subsequent effect, particularly in the resident mortgage market of reduced pricing it can be foreseen that the recovery of property prices can continue during 2014.

Can the Spanish Banks help speed up recovery

Like the UK back in the late 80,s and early 90,s one of the biggest issues which will hold back prices for a few years to come is the level of negative equity householders who bought during the boom periods are experiencing. Given prices have dropped by up to 48% since 2007 and that back during the boom years Spanish Banks lent against valuation not purchase price, at a time when valuation companies like TINSA were valuing ahead of the prevailing market conditions, there is still a huge population of people who are moribund and unable to move even if financially from an income point of view they are secure and able to do so.

Some action by the Banks in Spain in terms of refinancing may be required like it was in the UK to get buyers in negative equity moving but there is little in the whole process of lending or regulation from the Bank of Spain that would allow for this to happen. Some out of the box thinking in terms of mortgage lending to help the market would move matters forward at a quicker pace. Whether this happens remains to be seen.

Unemployment and a general unease of the what the future holds will still hold back some buyers but as the indigenous population and the international buyers become more and more convinced that prices are at the bottom we should start to see a fundamental shift and an increase of property sales, an increasing level of mortgages granted and small but steady growth on prices.

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