House price growth slowing in Spain, but headline figures mask regional differences

Taylor Scott International News

Although generally the housing market in Spain is perceived as recovering well there are signs of growth slowing, according to some of the latest figures to be published. Residential prices grew by 1.3% in May and by 1.5% in the first five months of the year, but this is lower than the 1.9% registered up until the end of April. The data from the latest index property appraisers, Tinsa, also shows that the average price of a property in Spain is still down 41.4% since 2007. However, the national figures hide signs of real growth in some sectors and locations. For example, prices in capitals and large cities as well as in the Balearic and Canary Islands were up 3.5% year on year in May. On the Mediterranean Coast prices increased by 1.6% and metropolitan areas saw smaller annual growth at 0.7%. But in the rest of the municipalities category prices have been falling, down 2.5%. But even the breakdown of the figures shows there are signs of slowing growth. Since the beginning of 2016 average prices on the Mediterranean Coast remained at the same level as the beginning of the year but were up 1.3% in the capitals and large cities and the metropolitan areas. In the first five months of the year the rest of the municipalities category saw growth of 1.5%, and the Balearic and Canary Islands have seen the strongest price growth at 4.2%. Meanwhile, the latest asking price index from property portal Fotocasa shows that sellers reduced their price expectations by an average of 0.7% in April compared to a year ago. The average asking price in April was €1,624 per square meter, down by 0.2% month on month but overall the index has been stable for 12 months now with prices never varying more than 1% either up or down. Beatriz Toribio, head of research at Fotocasa, believes that house prices will continue to go in different directions during 2016. ‘Whilst in some areas of the country prices are stabilising or even rising, in others they continue to fall hard. This is a consequence of the crisis the sector has lived through, which has left a market of two or more speeds,’ she explained. Official figures released by the Government also suggest a slowing in recent months. It says that year on year prices have increased by 2.4% but by only 0.2% in the first quarter of 2016. A breakdown of the figures show that house prices rose the most in the Balearics with growth of 9.6%, followed by Catalonia up 4.9%, Madrid up 4.2%, Extremadura up 3.7%, Galicia up 2.6%, the Valencian region up 2.4%, and the Canaries also up 2.4%. Taylor Scott International

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