TINSA April 2011

Unsurprisingly the TINSA index of the Spanish property market indicates that prices are continuing to fall.

Prices have now been falling for continually and consistently for over 3 years and most analysts expect prices to continue to fall throughout 2011.

TINSA suggest that prices are falling at an interannual rate of -3.7% overall:

The breakdown is as follows:

Provincial Capitals and large cities -4.6%
Metropolitan areas -5.3%
Mediterranean coast -5.7
Balearics and Canaries - 3.0%
Other municipalities -1.1%

TINSA estimate that the biggest drop in property values continues to be the coastal areas.

With record unemployment and a swath of properties swamping the markets, there is little to be optimistic about. The conditions that have previously pushed down prices are still acting and will continue to act for the medium term.

Repossessions are at an all time high and interest rates are set to go up. Most mortgages in Spain are based on the Euribor and as their payments increase more people will default on their mortgages forcing the banks to acquire yet more properties.

Many of the properties that have been repossessed by the banks are optimistically priced to say the least, and if the banks are going to move them off their books their will need to be reduced in price. This can only mean more downward pressure on property prices.

The advice to people looking to buy a property in Spain is to wait and consider renting.