ARCHIVED - Tinsa report slight increase in Mediterranean coastal property values in February

A year-on-year increase of just 2.4 per cent across Spain as the market continues to slow down

The leading Spanish property valuation firm Tinsa published its latest batch of monthly data regarding the market value of housing across the country on Wednesday morning, reporting that in February 2020 the recovery in market prices of recent years continued to progress at a minimal rate.

A year-on–year increase of just 2.4 per cent was the 14th consecutive rise of under 5 per cent, while in Mediterranean coastal areas an upward movement of just 1.4 per cent since February 2019 is observed. At the same time, though the nationwide index actually fell during the month by 2 points to 1,527, while the index for the Mediterranean coast dropped by 3.1 per cent.

In consequence, the firm reports that the nationwide figure is just 16.6 per cent higher than when the market bottomed out in February 2015, but 33.1 per cent lower than at the height of the boom in late 2007.

The staggered nature of the recovery can be seen in the breakdown of the figures, which shows that in Spain’s regional capitals and other large cities market values have risen by 27 per cent in the last four years, while elsewhere there are increases of 27.5 per cent in the Balearic and Canary Islands, 15.2 along the Mediterranean coast and 12.9 per cent in “metropolitan areas”, but only 5.6 per cent in the catch-all category of “other municipalities”.

The February figures show the sharpest year-on-year increase in the Canaries and the Balearics at 7.6 per cent, while values rose by 3.3 per cent in regional capitals and other large cities, 0.9 per cent in metropolitan areas and 0.6 per cent in “other municipalities”.

The latest bulletin also contains the monthly “market snapshot”, in which Tinsa highlight reasons to expect upward or downward movements in the value of homes in Spain, summarizing the following indicators among others:

- Sales figures: the latest monthly data (for December) show a 2.8 per cent year-on-year increase but an accumulated fall during 2019 of 2.7 per cent (-3.3 per cent according to official government publications).

- Building licences: the latest monthly data (also for December) show a 6.2 per cent year-on-year increase but a 5.5 per cent rise over the whole of last year.

- Mortgages granted: despite the relatively sluggish sales figures, the latest monthly data (for December) show a 44.7 per cent year-on-year increase but only a 3.6 per cent rise during last year.

- Unemployment: the latest monthly data (for February) show a 1.31 per cent decrease during the last 12 months, a slightly more positive result than the one for January.

- Euribor: the interest rate on which most mortgage repayments in Spain are calculated is currently at -0.288% (the average for the month of February), falling again after a gradual rise since last summer. However, the rate continues to be in negative territory as it has been for four years.

In general, these factors continue to point to rather less certainty over the nature of future developments than has been the case for the last couple of years. Especially eye-catching is the slowdown in sales figures in recent months, but the reversal of recent trends in unemployment figures and the Euribor rate could help to stimulate the market.

As ever, it has to be pointed out that the Spanish property market is far from uniform, and national averages tend to distort the picture: there are regions where the outlook is rosier than in others – in Murcia, for example, sales figures and values continue to rise according to the latest data - but in overall terms it the demand for housing across the country seems to have reached a natural peak, and in consequence there is less upward pressure on market value.

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