ARCHIVED - Valuation Society says Spanish housing prices have risen; Tinsa says they have fallen

The price of housing rises 1.1% in the first semester despite the Covid, according to the Appraisal Society but Tinsa says it has fallen in the third quarter

Data published by real estate portals as a reference for the price of a house is generally a fairly good guide as to general prices, but as these websites only display the pricess that sellers would hope to achieve for their property and not the ultimate selling price of the transaction, more reliable figures which better reflect the market situation are those published by professional valuers, although figures produced by the Valuation Society which periodically publishes a report on trends in the Real Estate Sector and Tinsa are giving slightly different interpretations of the current housing market.

Data published by the Sociedad de Tasación, the Valuations Society for want of a better translation, published on 1st October, concludes that, despite the coronavirus pandemic, the average price at which sales were closed during the first half of the year rose by 1.1%.

Although in the harshest months of the pandemic, co-inciding with the confinement, the real estate market was paralysed and property portals began to publish statistics that reflected falls in the offer prices for the sale of real estate, the reality is that the final cost for buyers continued to climb. The reason for this apparent contradiction between the decreases shown by property portals and the increase in the final price, was explained by Juan Fernández-Aceytuno, general director of the Appraisal Society, who said that sellers lowered the asking price for property to begin with, but then refused to negotiate down any further as the price was already perceived to be cheap, the net result being that buyers paid an average of 5% below a reduced asking price rather than a discount of 15% from a higher starting point; the net result being that they ended up paying more!


Despite the fact that the Sociedad de Tasación detected an increase in sales prices in the first half of the year, it also perceived a slowdown in the rate of increase. According to their data, the average price of new and used housing in Spain stood at 1,681 euros per square meter at the end of June 2020, with an increase of 2.7% over the same month in 2019. The price variation for the first half of 2020 stood at 1.1%, although the rate of growth has moderated for the third consecutive year. For the moment, buyers' expectations appear to remain modest and the sale prices are very similar to those of a year ago. According to pisos.com, in September, the price of housing increased 1.3% year-on-year, whereas Idealista points to a fall of 0.4% compared to the same period last year and a decline of 1.6% since March.

Tinsa, however, has today published its end of third quarter figures and states that the average price in Spain of new and used housing has experienced a 1.6% decrease during the health crisis, between the first and third quarters of 2020, to stand at 1,361 euros per m2.

The value represents a decrease of 0.4% compared to the same period of the previous year they say, and the first year-on-year drop in the price of housing in Spain in the last five years, since the third quarter of 2015.

The behavior of prices in the first half of the year was not homogeneous throughout the country, says the Sociedad de Tasación, as has been the case since the beginning of the recovery in 2015. Taking into account the average values by province, they show that the oscillation varies between an annual increase of 4.3% in Madrid, 3.7% in Malaga or 3.3% in Tenerife; or a decrease of -1.1% in Zamora.

The highest average price by province at the end of June 2020 was in Barcelona (2,743 euros per square meter), followed by Madrid (2,630 euros). In turn, the lowest figures were in Lugo (877 euros) and Badajoz (896 euros).

Tinsa: end of third quarter report
Tinsa have a slightly different opinion. They maintain that the weight of the health crisis is now beginning to take its toll on housing prices, which for the first time in five years have registered a year-on-year drop at the end of the third quarter , according to their data. The appraiser says that the average price in Spain of new and used housing has experienced a 1.6% decrease during the health crisis, between the first and third quarters of 2020, to stand at 1,361 euros per m2.

The value represents a decrease of 0.4% compared to the same period of the previous year and the first year-on-year drop in house prices in Spain in the last five years, since the third quarter of 2015.

In the case of the city of Madrid, the adjustment during the crisis reached 5.8% and also reflects a fall of 3.6% in the annual rate at the end of the third quarter. In Barcelona housing has depreciated 4.3% since the first quarter and 4.7% compared to a year earlier.

According to Tinsa, Madrid had not registered year-on-year drops in the average price of new and used housing since the first quarter of 2015. In Barcelona, on the other hand, the year-on-year decreases began a year ago, in the third quarter of 2019.

"The different regional figures share a negative sign in their variation rates with respect to the first quarter of the year and year-on-year decreases are the majority. The fact that these decreases are the current trend, points to the beginning of a new trend that, in the coming months, may show the intensity of the adjustment and the possible geographical heterogeneity that may occur ", says Rafael Gil, director of the Tinsa Research Service.

According to Tinsa, September was characterized by a trend of price adjustment, after a relatively stable August. Despite this, 13 provinces and 18 capitals still maintain higher prices than they had a year ago.

Furthermore, the average price in Spain is 13.7% higher than the minimum registered in the previous crisis and remains 33.6% below the maximum level reached during the property boom in 2007.

Evolution by region
In all the autonomous communities, the average house price is lower than the one recorded at the end of the first quarter, when the state of alarm was decreed.

The greatest adjustments during the crisis, above 8%, have been registered in Extremadura, Aragón and Castilla y León.

The Balearic and Canary Islands (+ 0.4%) and the Principality of Asturias (+3.0%) are the only regions that maintain increases in the interannual rate. The greatest decreases in the last 12 months were located in La Rioja, Extremadura and Andalusia, with falls of over 5%.

The adjustment suffered in recent months places the average price in Castilla y León, Extremadura and Galicia at its lowest level since the financial crisis broke out in 2008. At the opposite extreme, the Community of Madrid maintains an average value of 36.5% higher than the minimum marked during the financial crisis. In Catalonia, the increase from its minimum reached 28% and 24.7% in Navarra.