Home prices in Spain fell 4% in May compared with a 10.4% drop recorded in May 2013, indicating that the market could be nearing the bottom. The data from the leading valuations company Tinsa index also shows that this was the lowest annual drop in May since 2008.
The biggest price declines were on the Mediterranean coast, down 7.9%, but even that was the slowest drop since 2010. Madrid saw the smallest fall at 3.3% and other large cities also saw smaller than usual price declines.
House prices in Spain will continue to fall during 2014 and bottom out in 2015 when the demand for housing is likely to improve, according to a new analysis of the nation’s residential real estate market.
The report from Fitch Ratings points out that according to figures from the Housing Department the Spanish house price index (HPI) reached a peak year on year decline of 10% in December 2012 and fell by an additional 2.3% by the third quarter of 2013 which means that overall, the HPI has fallen by almost 30% since the onset of the financial crisis.
Despite the deceleration of house price decline, Fitch predicts that prices will continue to fall during 2014 and bottom out in 2015. It says that the house price decline will be driven by an estimated property overhang of above one million units.
The report also points out that during 2013 banks become increasingly willing to offload retail residential assets at deep discounts. Fitch expects this trend to continue, which, combined with the initiation of the commercial activity by the asset management company SAREB in the middle of 2013, will continue to put significant pressure on house prices. ...continue reading "House Prices Keep Falling in 2014"
This summer the cost of holiday rentals in Marbella has remained the same as last year, in the luxury sector as well as for standard properties. The town has not been affected by the fierce price war which has affected other tourist areas of the province, where the cost of holiday rentals has dropped by up to 20 per cent compared with the summer of 2012.
Estate agents in the Marbella area confirm that prices have remained at the same level, although they point out that the demand differs according to the target market. The most fortunate property owners are those who attract clients from Eastern Europe. Travellers who come from Russia, Ukraine, Kazakhstan and other countries from the former Soviet Union are the most popular this year because they rent the most attractive properties. In fact, they are able to pay an average of between 3,000 and 5,000 euros per week for a villa.
The Spanish property crisis and lack of liquidity has increased the amount of properties on offer related to holiday rental businesses such as rural houses for short lets and hostels, it is claimed. Not only has the number increased but also the variety of profiles and business models.
There has been a 200% increase in the number of these types of properties being offered by Spanish vendors to the UK and other international markets. There are two main reasons for this change.
Firstly is a lack of liquidity in the economy in Spain which has forced Spanish business owners to sell their business.
Spain’s new visa for non-Europeans buying property worth over €500,000 is set to spark huge interest from wealthy overseas buyers, it is claimed.
Secondly there has been an increase in expats seeking to move to Spain to start a new life and looking for a property related business. They are finding that there is the opportunity to buy a property at a reasonable price and start using it to earn an income from day one. ...continue reading "Increase of Spanish holiday rental"
The ongoing fall in house prices in Spain accelerated in the first quarter of this year as the housing market remained in a five-year-long slump and as banks sought to offload property on their books.
According to figures released last week by the National Statistics Institute (INE), house prices fell an average 14.3 percent in the period January-March from a year earlier after declining 12.8 percent in the fourth quarter of last year.
New home prices fell 12.8 percent, while the average price of existing homes decreased by 15.3 percent. Prices have now fallen by 39 percent from their peaks toward the end of 2007.
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