By the end of the year 2014, the average housing price came to 1,326 euros per square meter, 1.3% more than in the fourth quarter of 2013. According to the latest report of Valuation Agency (VA), residential property prices rose by second consecutive quarter after increase by 4.1% during the period from July till September. These six months have broken the seven years tendency of falling prices that had begun in the fourth quarter of 2007 (accumulating 44.8% of depreciation).
The analysis of these six quarters “shows that housing prices in Spain have reached its bottom,” says the VA report, adding that “the sector demonstrates signs of optimism” and that “the tendencies for the coming months are stable in regard to price developments”.
The annual average upturn in October, November and December took place due to the strength of the resale market, as the price of new homes fell again (2.2%). The highest growth was registered for low-quality housing (4%), than medium quality (0.9%) and high quality residential real estate (0.1%).
After price stabilization in 2014, the general director of VA does not foresee an immediate rise in housing prices due to the low volume of credits. “The mortgage situation shuts out the possibility of sharp rise in prices. 48,000 million in mortgages, 20% of which originated in 2006, will help to keep the stable prices.”
House sales increase by 14%
The housing sales rose by 14% in November according to the data provided by General Council of Notaries.
Between January and November 2014 the average quantity of monthly operations was 29,016, which is 17.5% higher than in the same period last year – 24,697.
The quantity of mortgage loans for housing purchase has increased by 37.2% in November, at the same time with stabilization of the residential property sales.
The percentage of purchases financed by mortgage loans was 40.6% of total sales.
Therefore, the figures “are showing stable situation in the Spanish property market,” conclude the notaries.
Is it a good time to buy?
The interest of investment funds and institutional investors to take an advantage of current changes in the real estate market by closing very attractive purchases, makes many consumers wonder whether it is a good time to buy residential property.
In Aguirre Newman’s opinion, “for those who can buy a house due to their working conditions and access to financing facilities” it may be a good time for purchase, but first they have to “make careful analysis of an offer”.
“In large urban centres and in the best city districts, the price is even rising. But in other areas, such as coastal, it is necessary to do previous research before buying, because the market is very asymmetrical.”