Looking ahead to 2016 it looks as if the Spanish house market will continue to recover but the latest data shows it is still a rollercoaster and growth very much depends on location.
According to the latest figures from appraisal company Tinsa prices are still increasing with its latest index up by 1.9% in November year on year.
However, the increase is somewhat exaggerated by an unusual fall in prices last year and on a monthly basis prices were down a fraction compared to September.
The Tinsa index shows, however, that the recovery is broad based as house prices rose in all the areas covered. Prices in Barcelona and Madrid were up by 3%, coastal areas popular with overseas buyers saw price growth of 1.4% and the Balearic and Canary Islands 0.2%.
But the recovery still has some way to go as since the peak of the market house prices are still down 41.3% in general, and 48.2% on the coast.
House prices, excluding new builds, actually fell by 1% in November according to the Idealists price index and are down 2.1% year on year.
However the index shows that five region saw monthly price rises, albeit marginal. The Balearic Island saw price growth of 0.9% followed by the Canary Islands up 0.5%, Andalucía up 0.3%, Navarra and Castilla-La Mancha both up 0.1%.
In contrast, the most significant declines were registered in Murcia with a fall of 3.3%), La Rioja down 2%, Catalonia down 1.9% and Madrid down 1.3%.
So it must be remembered that different indices use different measures and this has to be taken into account when trying to work out what is happening in the market.
Both the property division and research department of BBVA, Spain’s second largest bank, are optimistic about the outlook for the Spanish property market in 2016. They are forecasting stability for the overall market, and growth in some sectors during 2016.
All the key market metrics are already showing an improvement, with sales and mortgage lending up across the board, and house prices rising in a number of cities, the latest BBVA report says.
Anida, the bank’s property division, pointed out that data from Notaires shows that home sales were up 9.5% in the year to August, and up 8.7% in September. ‘This dynamism in sales is also continuing in the autumn months. 2015 will go down in history as the year the real estate sector stabilised,’ the Anida report points out.
BBVA Research echoes this optimism in its latest report which forecasts that 2015 will end with sales up 10%, to 400,000 homes sold, and that the sector will leave behind the recession in 2016, and consolidate its growth.
BBVA also points out that an acute shortage of new home building means that the excess new homes inventory is undergoing a significant reduction and is disappearing altogether in some of the most dynamic local markets.
It also forecasts that for the first time since the beginning of the global financial crisis, residential construction is starting to contribute to GDP growth as building activity starts to pick up.
