Falling Spanish Property Prices in 2009, Is it time to buy?
Falling Spanish Property Prices in 2009, Is it time to buy?
Posted by
SpanishHotProperties
305 days ago
(http://www.spanishhotproperties.com)
Category: World & Business |
As we enter 2009 there seems to be no good news with prices likely drop further during the year. Average Spanish property prices fell by 3% over 12 months to the end of the third quarter, according to Spain’s official House Price Index, published by the National Institute of Statistics (INE). Having declined by only 0.3% in the second quarter, the index, known in Spain as the Indice de Precios de Vivienda (IPV), suggests that price falls have accelerated towards the end of the year. Resale property, which the Spanish like to call second-hand housing (vivienda de segunda mano), is doing far worse than newly built property (obra nueva), at least according to the official index. Resale prices fell by 8.6% over 12 months to the end of September, compared to rise of 3.7% for newly built property. The index, which has only been published for 2 quarters is probably the most optimistic of all indices and Stalin himself would have been proud of such fine propaganda so when such indices confirm prices you know for sure it is for real and the situation is obviously a lot worse. By region, prices fell the most in Catalonia (-8.3%), followed by Madrid (-7%), the Basque Country (-6.3%), Navarre (-5.3%), Aragon (-5%), and the Balearics (-2.6%), and rose the most in Extremadura (2.9%), Galicia (2.6%), Murcia (2.1%), Castilla-La Mancha (1.4%), Andalucía (1.1%), Comunidad Valenciana (0.8%), and the Canaries (0.6%). The figures in Andalucia, Murcia and Comunidad Valenciana do take some believing and the reality on the ground is very different. At least the INE’s index is more reliable than the Ministry of Housing’s figures, which would have us believe that prices were still rising in the 3rd quarter, albeit by just 0.4%.
The actions of the banks who are now acting as Property companies gives a much truer reflection of the Spanish Property market. Having taken over developers or their assets in return for cancelling debts, many banks and savings banks, known as cajas, now find they own a wide variety of real estate assets from land and flats under construction to finished developments and business parks. Knowing what to do with all their new real estate holdings is an increasing problem for Spain’s banks. Big banks like Santander have set up new divisions to manage property portfolios, which in Santander’s case is valued at more than 2 billion Euros. But banks are not property companies, and on the whole do not do a good job of managing real estate assets. That said, the property crash of the early 90s turned out to be one of the most profitable episodes in the history of Spanish banking. Having got assets on the cheap, all the banks had to do was hold on until the market picked up, which it inevitably did.
Such news begs the question about when is the right time to enter the Spanish property market. According to Susana Suspenda the Marketing and Operations manager for Spanish Hot Properties The second half of 2009 will be the ideal time to enter the market who claim they have a lot of buyers and investors sitting on the fence and will probably buy if they can get a further 10% reduction. “It is my view these buyers will enter the market in the second half of the year and before that if they can get the right deal” confirmed Susana.
Spanish Hot Properties are one of the leading online real estate agents based in Spain selling property in Mallorca and Spain. From the best deals in the Balearics, to the cream of costa del sol property for sale, the team at Spanish Hot Properties can help you take advantage of falling Spanish property prices , contact www.spanishhotproperties.com.
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