Nationally residential property prices in Spain increased by 1% last year with the market having bottomed out and now on the way to recovery, new index figures suggest.
The data from appraisal company Tinsa shows that the overall rise in prices was boosted by an increase of 2% in the regions of Catalonia, Madrid, and the Balearics. It is the first time since 2007 the Tinsa index has end the year higher than it started.
The index, based on the firm’s own figures relating to new and resale properties, shows that prices rose the most in Catalonia with growth of 5.3%, followed by Madrid up 3.3% and the Balearic Islands up 2.7%.
But not all regions did well. Prices fell by 8.5% in Navarre and by 4.3% in Murcia. The Tinsa report pointed out that there are considerable regional variations.
‘It’s important to remember the market is tremendously heterogeneous and evolves at different speeds according to area. Prices are rising in some areas, but still falling in others,’ the index report says.
Some 21 provinces and 15 provincial capitals saw price increases in the final quarter of 2015 compared to the same quarter in 2014 but there were falls of more than 5% in nine provinces and 10 capitals.
The firm expects 2016 to be a year of stabilising prices rather than a sudden recovery. ‘Prudence invites us to interpret rising prices in terms of stabilisation. The incipient change in the trend is based on market values currently at minimums, so a progressive normalisation of the market can mean large percentage change increases, which can be expected to moderate in the coming months,’ the report adds.
Mark Stucklin of Spanish Property Insight believes this will be the case. He forecasts prices to rise by a fraction but showing no signs of taking off. He also pointed out that figures from another appraisal company, Sociedad de Tasación (ST), show that new property prices rose 2.9% in the course of last year, the first time that has happened since 2007, and up from a fall of 2.2% a year ago.
The data also shows that new home prices rose 6.2% in Madrid and 4.8% in Catalonia and the firm reports rising sales, especially demand from overseas buyers.
Meanwhile, the latest data from property portal Idealista shows that the fall in prices in the second hand homes market moderated in 2015 with values down 0.7% in the final quarter of the year.
The Balearic Islands led the way with year on year price growth of 3.3%, followed by the Canary Islands up 1.9% and Madrid prices up 1.6%. However prices fell 6.4% in Extremadura, 6.6% in Castilla La Mancha and 6% in Asturias.