Spanish property prices continue uneven recovery

Photo: David Hurt

Spanish property prices are continuing their uneven recovery, as the market gradually rebounds from the recession.

Two new reports out this week highlight the changing fortunes of the country's real estate, albeit one at a faster speed than the other.

The latest statistics from the Property Registrars show that prices increased 6.6 per cent in 2015, the same rate of rise the prices recorded in the third quarter of 2015. On a quarterly basis, price growth hit 0.9 per cent, moderating the market's fall from its peak highs of 2007 to 28.4 per cent.

The latest figures from Fotocasa, though, show that prices actually fell 0.8 per cent in 2015. Nonetheless, this is still a marked improvement upon previous years: in 2014, prices fell 5.7 per cent, while in 2012, they fell 10 per cent. Indeed, 2015 marked the smallest annual decline in prices since the crisis, notes Spanish Property Insight.

The Balearic Islands led the climb from the bottom, with prices up 3.3 per cent over the year - followed by La Rioja (2.4 per cent), Madrid (1.4 per cent) and Andalusia and Galicia (both 0.7 per cent).

Beatriz Toribio, head of research as Fotocasa, explains that the market is now moving at two separate speeds: "Whilst there are parts of Catalonia, Madrid, and the Balearics, where prices have bottomed out, in places like Castile-La Mancha and Extremadura, there is still plenty of room to fall."

Even within city areas, price performance is varied, with Madrid and Barcelona enjoying strong recovery, despite more unequal growth on their outskirts.

"Prices look to be more or less stable, but still slightly negative at the end of 2015, with little sign of upward pressure on the horizon," comments Spanish Property Insight.

Nonetheless, conditions have still made a marked recovery compared to the state of prices in recent years. With the Euribor at recent record lows, Spanish real estate is now at the point where it is both affordable and on the cusp of tangible, long-term capital growth.

Indeed, Fotocasa also highlights an increase in mortgage lending in the country, which is helping to boost the market.