ARCHIVED - More evidence of slowdown in Spanish property market as prices rise by just 4.7 per cent

A sharp fall in the rate of appreciation of housing in the Region of Murcia

Further evidence that the recovery of the Spanish property market may be experiencing a significant slowdown was provided on Thursday by the government’s central statistics unit, whose quarterly residential property price index for the third quarter of 2019 rose by just 4.7 per cent in comparison with the same period in 2018.

This is the least significant increase since the last quarter of 2016, and the rate at which property is appreciating appears to be slowing down in most parts of the country. Among the 17 regions of Spain the increase was greater than in the previous quarter only in the Basque Country, the Balearics, the Canaries, Andalucía and Cantabria, while the slowdown was most significant in Madrid (4.6 per cent as opposed to 6.5 per cent), La Rioja and Murcia.

The bulletin published on Thursday reports that housing in Murcia is now worth 3.7 per cent more than a year ago, whereas in the third quarter of 2018 the rate of increase was 5.5 per cent. However, since these data were first compiled in 2007, at the end of the boom in the market, they illustrate graphically the way in which the market collapsed in 2008: in Murcia in 2007 prices were increasing by as much as 15 per cent per year, but they began to fall in 2008 and by 2013 the annual rate of depreciation was 16 per cent.

Not until 2014 did a timid bounce-back begin, and it was only in 2018 that the rate of appreciation rose to above 3 per cent per year: in this context the latest figures suggest that for the Costa Cálida stability in the market appears to be most likely scenario in the short-term future.

Elsewhere, the data show that the market price of housing has risen most sharply over the last 3 months in the Balearics, where an increase of 4.5 per cent is observed, with no other region coming close to matching that rate of appreciation: the next highest figure is 2.1 per cent in Andalucía, while the Region of Murcia (0.7 per cent) is well below the national average of 1.6 per cent.

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