Are house prices in Spain really rising

The INE in Spain reported for the second quarter a small but positive increase in the overall price of property in Spain.

Since the year of 2008 this was the first quarter of any price increase after property prices crashed by over 40%.

Increases in Spanish house prices in quarter 2

The national statistical office in Spain takes it infromation from actual sales of Spanish homes completed and across all sales that have taken place. Given this is the case one would expect the data to be closest to reality in comparision with other instituations that provide similar data.

The key issue with the data is that information on what is happening in the market has only be kept since 2007. This means that whilst the specific data for that quarter is robust there is insufficient years to predict trends and analyse whether the quarter in question is a one off or the start of a true recovery.

A blip or a sustained trend

Other providers of data like TINSA  report on a more regular live time basis and over a longer period of time. TINSA however take their data from their own valuations undertaken in the month and use a relativley small sample.

TINSA like the INE are predicting at least some sort of stabilisation and whilst they are still showing year on year decreases on price per meter square the rate of decline has slowed significantly.

The month of August however was reported by TINSA as showing another month of declines when looking at each region.

Should buyers panic buy

Legal advisers are reporting an increasing number of sales falling through for their buyers due to a higher offer from someone else and generally higher levels of buying activity from overseas buyers. This is mainly the case in the areas relating to the main Cities the traditional tourist areas as non resident buyers who believe the bottom of the market has been reached look to secure their holiday home at value levels not seen since 2003.

As in any market as volatile as the current Spanish one and with a lack of long term robust data it must be remembered that a few incidences of gazumping and higher front end activity does not mean people should panic buy. The Spanish legal process should be followed diligently at all times no matter how many other parties are interested.

Read the full article: House prices in Spain have they stabilized