Spanish market 'in turmoil' over conflicting property figures
Spain's property industry is in a turmoil
over the latest prices data released in the official House Price Index
published by the National Institute of Statistics (INE)
The survey claims the average price of a
residential property in Spain depreciated by 11.2% in 2011, suggesting that the
market crash, which started in 2007, is far from over, say industry watchers.
They believe the price slump is set to continue
while other pundits, and some banks, argue the depreciation has slowed
dramatically in Q4 2022 and will begin to bottom out when the first quarterly
figures for 2012 are released.
The INE figures contrast with the 2011 price fall
of 6.8% reported by the Spanish Government Department of Housing and the 8%
fall reported by Tinsa, the leading Spanish appraisal firm that works mainly
for the banks.
Three separate reports producing three different
percentage falls for the same surveyed period suggests big discrepancies in the
base prices and there is a growing demand to use a calculation based on the
known prices at the peak market in 2007.
However, a spokesman for specialists,
PropertyInSpain.Net claims none of the figures is correct:
"Prices have dropped overall by 43% in that period
and this means an average drop of 10.75 a year. It's pointless to have year on
year comparisons in such a volatile market. Everybody knows the base prices
across Spain when the market peaked, so it is more helpful to buyers to know
what discounts they are getting in today's market.
"We are currently looking at the relaunch of a
development in Costa Almeria we launched originally for the developer in 2007
and the bank that has taken over the scheme wants to sell them at a 40%
discount - even though some of the bank's own executives are among the original
buyers and will have to take a hit on their equity," he added.
The INE index claims that peak-to-present prices
have fallen by an average of 20.6% (new builds -11.9% and resales -27.7%) and
that the biggest falls were recorded in Madrid and Catalonia and the least in
Murcia and the Canaries. But even those figures are disputed by some experts.
Commentator, Mark Stucklin of Spanish Property
Insight said: "I don't believe that for a second. In my experience, prices
in Murcia are down much more than Madrid. Right now I can't explain why the
index seems to get it wrong when it comes to the regions."
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