Spanish house prices back to 2003 levels

Spanish house prices fell another 10% in quarter two of the year according to statistics released this week by Tinsa, a leading appraisal company.

The peak-to-present drop in house prices has now hit -37.1%, taking Spanish property values back to where they were towards the end of 2003. The rate at which prices are dropping has slowed slightly since the 1st quarter, when they fell 12.1pc.

The regional breakdown of price data for the second quarter shows that Cantabria is the region that has seen the largest year on year decrease in its property prices at 15.7%, it is followed by Catalonia, 15.2%, and Murcia & Castilla la Mancha, both at -13.9%.

All regions saw house prices fall, but those in which they fell the least were La Rioja, 5.0%, the Balearic Islands, 5.1%, and the Canary Islands, 5.3%. What is evident in the second quarter is that, in general, prices have been more robust in Spain’s tourist areas.

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Brits still biggest investors in Spanish property market

BRITS continue to be the biggest foreign investors in the Spanish housing market - picking up cheap deals as prices continue to fall.

Prices in Spain fell by over 13% in 2012, even further than the declines registered in the years 2011 (-10.5%) and 2010 (-6.6%), and accumulated a drop in their value of around 30% since their peak levels in the first quarter of 2008. The sluggish performance of the Spanish economy means demand from local buyers remains weak.

The College of Property Registrars estimates that house purchases fell by 10.6% last year to 330,750 transactions. They also confirm that the property transactions were distributed almost equally between new housing (49.9%) and used (50.08%).

Approximately 8.12% of the house purchases recorded in Spain in 2012 were for foreign citizens, which is 6% more than in 2011 and the highest result of the last five years, next to that achieved in 2007 (8.2%).

Coastal regions have seen a higher percentage of home purchases by foreigners: the Balearic Islands (24.95%), the Canary Islands (22.11%), Valencia (18.01%), Murcia (11.24%), Catalonia (9.34%) and Andalusia (8.86%).

By nationality, these purchases were divided between British (16.6% of the total), French (9.9%), Russian (9.6%), German (7.9%), Belgian (6.5%), Norwegian (5.7%), Italian (4.9%) and Swedish (4.6%).

But Brits have been warned that new legislation due to come into force this summer could make it harder to rent out second homes. All holiday lets will need to be authorised and have a license granted by the local government, some of which aim to restrict rentals in favour of the local hotel industry.