Mac's Poll - Let's Vote

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POLL: "Property prices in Spain can only go up from now on…"
Tuesday, December 2, 2014 @ 10:36 AM

According to the Financial Times, Spanish house prices are rising for the first time in more than six years, suggesting that the country’s economic recovery is gaining traction even in sectors that were hit hardest by the recent crisis.

Permits issued for building new homes in Spain have increased dramatically this year with 2,883 handed out in September alone, says the ministry of public works. By the end of the third quarter of 2014, a total of 27,598 new build licences were granted by the College of Technical Architects, compared to 22,817 in the same period last year. And the amount of permits issued in September this year was up 31.6% on the same month in 2013. Although these figures are encouraging in terms of the housing market recovery, they remain a far cry from their peak in 2006 when over 600,000 were issued in the first nine months of the year. But the ministry says the upsurge of 20.6% so far this year is a positive sign that interest in buying property in Spain is on the up.

In addition to this, the number of new mortgages signed in September this year reached 19,323, a 29% increase on the same month in 2013. According to figures published by the National Institute of Statistics, the September figures confirm a tendency that began in June 2014, with two-figure year-on-year increases being posted every month for the past four months.

June 2014 saw an almost 19% rise in the number of new mortgages being signed compared with the previous year. This was followed by a 28.8% year-on-year increase in July, and a 24% rise in August. The average value of the mortgages being signed in September was 107,850€, a 10.6% increase on the same month in 2013, whilst the total capital loan increased by 43.5% compared with the previous year, topping the two billion euro mark.

(To read the article published by the Financial times click here : Read article here - Financial Times)

So does all this indicate that property prices can only go up from now on?

Please cast your vote and leave a comment.

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13 Comments

Feeg said:
Saturday, December 6, 2014 @ 7:53 AM

Unfortunately the FT report will only give false hope to potential sellers, as it disregards the staggering number of unsold properties. Official figures (likely to be incorrect and biased) put the number at +/- 800,000, while educated assessments from others including NGAs' put out figures of 1 million upwards. Of course no real estate agent worth their salt would ever tell a potential buyer that prices will go down, but the reality is that although prices may be near their bottom i.e. probably only another15- 20% to go, the bottom is likely to remain at that level for the medium future, say 3-5 years. Private sellers are in the worst position as they need cash buyers due to the banks reserving mortgages primarily to offload their own heavily discounted properties. An increase in sales of a few thousand is not significant in the scale of things, and most new building is taking place only on prime sites and coastal front line locations, such as the Taylor Wimpey Development at Estepona West. The golf estates and "sea views from the mountains" have a long way to go.

poedoe said:
Saturday, December 6, 2014 @ 9:12 AM

When the Spanish Government kick the backside of the administrators to get on and supply the thousands of Habitation Certificates on completed sales & get the crooked Builders into court. Thousands of property purchasers since 2008 will then be able to live in the properties they have purchased without the worry they are breaking the law.

midasgold said:
Saturday, December 6, 2014 @ 9:24 AM

FEEG.- Excellent observation and 100% correct.

gingerbear said:
Saturday, December 6, 2014 @ 9:24 AM

Maybe a third question should be. Will Spanish property prices stagnate? I think, unfortunately, that is the way forward for the next few years, with a modest recovery after ( assuming there is no financial crisis in the near future). There are still too many empty properties even in desirable areas.

Bob. said:
Saturday, December 6, 2014 @ 9:56 AM

Yes probably best part of the above is true but since very few cranes have been in operation for some 5 years at least we are now seeing new properties springing up so we are going in the right direction albeit rather slowly.

I think it will be some years before the Spanish economy is thriving again but that of course depends a little also on how the economies of other countries perform because as they improve then more people will come to Spain for holidays and also to buy holiday homes.

If prices of homes in Spain stay low then the people it will really affect are those that are selling up and moving to another country, and if they have been here a while and paid top dollar they of course will lose money.

People like myself that have made a life out here and maybe retired and intend to sell and buy a different property wont generally be affected because if they get a low price for their property they will obviously pay a low price for their other property. If prices rocket and they get a great price they will in the same way have to pay much more for the one they are buying. Its people who are leaving that will lose out and of course incoming purchasers can still buy a real bargain.

Those of us that live here permanently have our problems like every country but at least we have I think a better quality of life and the weather well............

David H said:
Saturday, December 6, 2014 @ 6:13 PM

Of course the number of new mortgages is rising. SAREB and its associates are selling some properties (Feeg's golf & sea views from the mountains) at half the price they were listed at 10 years ago.
Some new builds are 'high-end' and speculative i.e. no obvious buyer interest on completion but in hope of catching a money-raddled minority next year.
I am expecting a short-lived 'bargain basement' success followed by stagnation.
If I am wrong I will be both astonished and delighted.

Michael said:
Saturday, December 6, 2014 @ 6:16 PM

Always remember, nothing remains the same forever. Mini skirts/long dresses, long hair/skin heads, etc, etc. Boom and Busts have been in existence since the foundation of time. Ireland is the classic example where property prices fell by over 60% but now, as predicted, see a resurgence in prices again -- until the nest collapse once again. So yes, I agree, as the Spanish economy picks up and people have more disposable income, house prices will inevitably rise again,

Paul said:
Sunday, December 7, 2014 @ 8:30 AM

The Spanish banking sector is recovering and no longer needs to deep discount the properties that it still holds. This will stabilize the pricing in the property market. People selling have had to compete against these low prices and will now find they can achieve a fairer price. There will not be price rises but there will be stability.

wodger said:
Sunday, December 7, 2014 @ 10:20 AM

Will the Black Sea coastal areas of Romania & Bulgaria be the new Spain/Greece & attract foreign property buyers? Things are changing since these countries became part of the EU. If this happens then prices may remain rock bottom in Spain. Would Russian buyers be attracted by the proximity of these areas to their country?

Paul said:
Sunday, December 7, 2014 @ 2:48 PM

To explain this, Spanish banks have been told to they need to have a minimum cash reserve target, properties that they held did not qualify for this reserve. so to convert them to cash they discounted them and sold them below market value.
They now have enough reserves to satisfy the legislatures so do not have to discount

Ed said:
Monday, December 8, 2014 @ 5:56 PM

When all of the distressed properties are sold, and not until then, will property prices stabilise and start to rise.

In Ireland properties rose in value only because of the unbelievable value that existed and as those were sold a lack of supply drove the prices up.

Until the supply side (of cheap distressed properties) contracts there will be no improvement. There are people better qualified than me who can guess when that is likely to happen but I'd say your mortgage reducing over the coming decade will be the only way any negative equity will be repaired.

amogles said:
Tuesday, June 2, 2015 @ 5:27 PM

Absolutely true. Just a year ago when I needed workmen to come over and do jobs on my house, and I asked "when can you start", they would say "we can be here tomorrow at 7am with our machines and materials". And it was no joke. They turned up on the strike of the clock. Today when I ask the same question I hear "we're busy now, let me call you in three weeks time". Likewise, several new construction sites have begun in my area. People are investing again and the building industry is seeing this. I don't know who is doing the investing or where they're taking the money from. But its happening.

amogles said:
Tuesday, June 2, 2015 @ 5:34 PM

I don't think the backlog of distressed properties needs to be totally cleared before building picks up. On the contrary, many of the unsellable properties are unsellable for a reason. Many have serious flaws in the design or workmanship and were put up by jerry builders seeking to make a quick buck at a time that you could find a buyer for anything. Even if you gave them away for free today, buyers would look the other way. The years of abandonment have thankfully reduced many such properties to the point that they can no longer be inhabited and I think ultimately they will be sold as land plots. Buyers want quality houses in good locations. That's what makes a good market.