en
General overview
Over the first few days of every month, property valuations firms, analysts and statisticians work tirelessly to compile and publish nationwide property price figures in respect of the previous month. When comparing the state of play in Spain and the UK, for instance, the contrast is pretty clear at this point in time; Spanish property prices are flourishing while the UK housing market is floundering.
Spanish Property Prices
Real estate valuations firm Tinsa published yesterday its February IMIE report1 for Spanish property prices, which tells us that residential real estate across the country was, on average, 4.1% more expensive last month than in February 2018.
Consistent year-on-year variation
The good news, as far as the nationwide property market is concerned, is that all the area categories used to calculate the index registered interannual price increases.
In fact, not since August 2018 have Spanish property prices dipped into negative percentage points when compared to the same month in the previous year.
Price increments by area
Real estate values within regional capitals and large cities were the strongest contributor to the averaged national figure with a substantial 7.2% year-on-year growth.
Meanwhile, metropolitan areas also bolstered the interannual price increment, increasing in line with the Spanish average at 4%.
Residential property on the Mediterranean coast, an area that includes the Costa del Sol, shot up by over 10% in January; however February’s figure is a more moderate 2.9% increase in valuation.
The Balearic and Canary Islands, which were largely responsible for the price surge of 6.5% in December, experienced a much more sobering 0.3% increment in February, while the percentage for all other municipalities grew 0.6% year-on-year.
The bigger picture
The long-term upturn in prices since hitting the floor in the wake of the 2008 financial and housing crisis has now reached 13.8%, meaning prices are creeping back up month by month in 2019 and should follow much the same pattern as last year.
That said – and in the context of real estate elsewhere in Europe – Spanish property prices are still some of the lowest on the continent. Therefore, they continue to offer foreign home buyers an extremely economical and appealing second home investment or retirement alternative.
UK Housing Market
If Spanish property prices are a reason to celebrate, the UK housing market is a source of great concern.
Nationwide Building Society’s House Price Index for February 20192 shows that UK property prices further stagnated in the second month of the year; advancing just 0.4% year-on-year after an even worse 0.1% annual change in January.
To put this stunted growth into context, last year’s interannual percentage price rise for the same month was 4.5%3.
A poor 2018
Last year, the average value of residential property in the UK increased by its lowest margin (3.3%) since 2013, falling from 4.5% in 2017, 7% in 2016, 6% in 2015 and 8% in 2014.4
Of course, on the face of it, this is good news for home buyers (especially first-time buyers), since prices have experienced five years of year-on-year consolidation. In fact, the average house price has increased by around 60,000 pounds sterling (approx. €69,550) in this period.
However, with banks being more cautious about lending in the backdrop of the “B” word, credit is more difficult to come by and, in any event, consumer confidence has taken a big hit and activity has been lower.
“On its knees”
An extreme analysis of the current state of the UK housing market was recently given by Jonathan Samuels, CEO of Octane Capital, who commented that “March could be the month the property market finally succumbs to madness”; adding that the sector as a whole is “firmly on its knees”.
He is, of course, referring to the “softening” of the market where demand for buying property dries up and home owners are either stuck with their asset or are forced to sell it at an excessively low price.
Conclusion
It’s true to say that it's been a long time since the UK and Spanish property markets were polarised in this way, with Spain’s flying high and Britain’s performing a potential nosedive.
If you’re a home owner in Spain, your asset is set to accrue more value in the short-to-mid-term, so you’ll likely be relieved to have already moved abroad.
If you’re looking to sell up in the UK, I can understand you may be slightly wary, as the value of your home is inextricably linked to a political charade whose next chapter will manifest itself at the end of this month.
However, if you feel that now is the time to take advantage of beneficial market conditions by purchasing a second home on the Costa del Sol, get in touch with VIVA today!
Sources:
1 https://www.tinsa.es/servicio-de-estudios/imie/general/febrero-2019/
Vlaams-Nederlands
0 Comments
Leave a Comment
DISCLAIMER
The opinions and comments expressed by contributors to this Blog are theirs alone and do not necessarily reflect the views of VIVA Homes Under the Sun Ltd, any of its associated companies, or employees; nor is VIVA to be held responsible or accountable for the accuracy of any of the information supplied.
Have you got something to say?