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Spain statistics

I like statistics and financial data, so I will be posting a variety of information that I hope will be equally useful to others, even though perhaps not as exciting...

Getting technical: Median and Average property prices, up or down?
05 May 2017 @ 20:36

The property portal idealista has released some unofficial data for April Spain property prices that show a decrease of 1.3% compared to last year, even though they have increased over the previous month. The official INE organisation has not released its own data yet, but the Costa del Sol is expected to have an increase in general. However, a little data checking never hurt anyone smiley So I have taken our own property data collected every week, and used Mijas villas as a working example because the effect of what I want to show is more pronounced.

It is true that there was a sharp drop of the average price of Mijas villas during the last couple of weeks:

Average price of Mijas villas

Looking at the number of villas on the market for the same location we see there was a corresponding sharp increase:

Number of Mijas villas

So it appears possible that what I mentioned some weeks ago might be happening again - namely, that as owners see rising prices, more and more of them are willing to offer their villa in Mijas for sale. But the average price should not be dropping so much, other things being equal - the point of having an average is that it shouldn't matter how many properties are on the market, the price gets "averaged" out. So I looked at each individual villa price in detail to understand what is happening:

Price of each villa in Mijas

Each data point in the graph above shows the price of that individual villa. As you can see around 80% of the properties are between 400,000 and 1 million euros, and the other 20% are covering a much larger range of 1 m - 2.5 m euros. Could it be that the higher priced properties are being sold fast and therefore the whole "total amount" of euros in the market is dropping? That would explain the average price drop since it is simply the division of (total euro value of properties in the market) / (number of properties).

I cannot offer confidential data but indeed there were a few large amount sales in April of villas in the Mijas area (1.65 m on the 28th, 2.25 m on the 16th, etc) that have therefore brought the average price down, since there are more of the "lower priced" villas left in the calculation. This data is collected from a large agent sample, so even though it is not official, it is quite reliable.

A more accurate indicator is the median property price - I apologise for sounding like a teacher, it is not my intention, just to explain that median is the price of the middle property, i.e. in the graph above half way along the x-axis. For Mijas villas this gives us 695,000 euros for the median villa in Mijas, a level that has been stable for months and even increased slightly (0.1%) over the last month. I.e. if anything this confirms that average prices have wild fluctuations sometimes, even in cases such as these which could be perceived as good news, since higher priced property being sold shows confidence in the market.

In conclusion, I would state that I am guilty of being ever the optimist, including on this occasion where a declining average price actually is due to proportionately more high-valued properties being sold, which might indicate more confident buyers. If you are interested in browsing at the villas in Mijas that I used for this article I leave the link here: Thanks for reading.

Like 1


midasgold said:
13 May 2017 @ 09:36

In my (Mijas) urb - 3 villas sold in the last six months - with no other sales since 2008. All sold at less than 50% of 2008 prices.

Volleyer said:
13 May 2017 @ 10:40

Good points. I think the data you are referring to is the difference in the average price of properties ON THE MARKET (i.e.: high priced ones disappear bringing the average price of those left down). It would mean though that there are no new higher priced properties coming on to the market to replace them. If this IS the case then alongside this it would be good to show the trend of the number of properties on the market (say) above 1M Euros.
What would be most useful (although probably difficult to obtain) to show the difference between advertised price and sold prices (even as an average).
Interesting though, thanks Terry Mc.

hbcproperties said:
18 May 2017 @ 09:27

Thanks to both for your comments, apologies for the late reply. Midas, that's what I am seeing too - I'm glad it is confirmed by someone "on-site". Looks like the properties are moving now (at the right price).
Volleyer/Terry, both of your data suggestions are good, I will follow up on them here. You know how to hit a soft spot with my stats addiction :-) Sold prices are notoriously hard to get because they are very often decided at the notary! But it's possible - watch this space.

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