House prices fall by an estimated 5%

The latest TINSA figures indicate that prices in Spain are still falling at a relatively steady rate. Whilst there is an increased decline over the last trimester, most observers consider that the worst of the crisis is over, but that property prices will continue to fall.

The TINSA property valuers suggest that prices have fallen at a year on year rate of 5%. TINSA reckon that property prices are falling fastest along the mediterranean coast, which they estimate is falling at a rate of 8.7% per year.
The coastal areas saw the largest inflation during the boom years, so it is perhaps unsurprising that they are the biggest fallers in recession.

They estimate that a property worth 100,000 euros last September would be worth 95,000 euros today.

Download the latest TINSA report. (Spanish)

Owning a property in Spain in this market should be viewed as a liability rather than an asset.

The reason for the decline can be put down to the over supply of property on the market, the high unemployment rate in Spain and general maliase in the wider economy.

It would be a mistake to assume that a property price decline is confined to Spain. Similar declines are being observed in other markets, such as UK, Ireland and the USA. The Halifax reported a recently recorded drop in UK house prices.

The message to potential purchasers out there is to continue to wait and rent property in Spain instead of purchasing.

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September 2010 Tinsa

The August TINSA index (Published September), indicated that prices are still falling.

The year on year rate of decline is -4.6%. (July was -4.3%).

Tinsa have guaged that prices have been falling year on year for more than two successive years.

Some commentators have suggested that the Spanish property market is approaching the bottom of the curve.

The number of buyers entering the market is down for the first half of 2010 to 2009.

The simple economic principle of supply and demand will continue to drive down prices. Whilst there is a dearth of buyers and an over supply of property, prices will continue to deflate.

The poor domestic unemployment data, wider economic gloom and poor performance in other housing markets will continue to take it's toll.

TINSA's figures are based on property valuations, and not on actual sales data.

Original Article