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Spanish Property is Undervalued by 26%
17 January 2016 @ 16:20

According to the Organisation for Economic Development (OECD), property prices in Spain are undervalued by 26%, whilst prices in the United Kingdom are 7% overvalued.

The research by the OECD has been running for the last decade and examines property prices against wages in each country.  It then compares this against the long term average for each country.

According to the methodology used by the OECD, a value of 100 shows that property prices are fair value and in line with long term averages.  A reading of 90 means property is 10% undervalued compared to its long term average.  A value of 110 would show a 10% over valuation compared to the long term average. 

Spain scores a value of 74 in the latest research, giving an under valuation of 26%.



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6 Comments


windtalker said:
19 January 2016 @ 22:06

You are right but the reason is for the undervalue is due to the massive over building and the corruption within the industry.


midasgold said:
23 January 2016 @ 08:31

Total rubbish,The" Value" is what both agree to buy/sell at.


ufotour said:
23 January 2016 @ 11:19

Completely agree with midasgold. Am looking at buying a flat in Seville and virtually NONE of those I've been keeping an eye on has sold since the summer. This suggests that people don't think their price is in accordance with their "value". There just aren't any buyers out there at these prices so in terms of the Spanish market they're overvalued.


ufotour said:
23 January 2016 @ 11:19

Completely agree with midasgold. Am looking at buying a flat in Seville and virtually NONE of those I've been keeping an eye on has sold since the summer. This suggests that people don't think their price is in accordance with their "value". There just aren't any buyers out there at these prices so in terms of the Spanish market they're overvalued.


John Kennedy said:
21 June 2017 @ 14:44

Agreed, Spanish property prices have gone nowhere since the 2008 "crisis". Banks hold large portfolios of property that they took from overstretched builders who did not recognise what was happening to their market - and then the bubble burst leading to price drops of up to 50% in some cases. Banks are still holding large property portfolios of overvalued houses and are reluctant to take a loss, so their balance sheets are also unstable as a result. HOWEVER, there are small signs of improvement in prices for some categories. Small cheap properties with the potential to refurbish / develop further are selling like hot cakes (in the Canary Islands particularly) which could lead to a rub of on the market as a whole. I can´t say that it WILL improve the whole market, but rallies in price always start somewhere and spread.


ufotour said:
21 June 2017 @ 19:13

Hi John Kennedy - since my comment a year and a half ago things are definitely changing and prices seem to have gone up about 10% in the last 12 months or so in Seville for attractive properties. So things are on the move again - even see the odd crane again from time to time!


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