Archive for June, 2009

 

June 16th, 2009

Spain had 614,000 new homes sitting unsold at the end of 2008 -lower than most analysts’ estimates- according to the first major housing ministry study, which surveyed or visited 6,810 real estate companies, or around 70 percent of the sector.

The survey is the first attempt by any public or private body to pin down the size of the stock of unsold Spanish property -estimated at over 1 million homes by some economists- using a methodology similar to the respected Royal Institution of Chartered Surveyors (RICS) study of the UK market.

“The survey looks good to me, very representative and well designed,” said Jose Carlos Diez, an economist with Intermoney in Madrid. However, he added the figure was still represented a serious challenge despite being almost half of many estimates.

“You should not lose perspective, the figure is less than expected, but 600,000 homes is still a lot of homes.” At the current rate of sale, the stock will take around three years to be run down while Spain’s housing market -the former motor of economic growth- suffers a hangover after a 10 year boom. In that time prices tripled and huge tracts of the coast in were disfigured by rows of uniform apartment blocs.

In 2007 alone Spain built 690,000 new homes, even though underlying demand is normally less than half that. Now hundreds of builders are going bust every quarter amid a 34 percent dive in sales in the year to date and their assets clog up banks’ asset sheets.

The survey published on Friday also notes that Spain had 627,000 homes in the process of construction at the end of 2008 — 70 percent of them almost finished and 39 percent already sold.

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June 16th, 2009

Last month’s House Price Index report fell a little flat because of the hope it would show that the decrease in house prices had reversed. Actually, both the March and April reports showed that Spanish property prices had remained at a relatively stable 10% down on an annual basis. While this is far from exciting – and a far cry from a complete turnaround – the data does suggest that house prices in Spain have bottomed out.

For the past four months, the House Price Index has been steady, 10% down Y-O-Y. Compared to the dramatic decline measured between the middle of 2006 and the start of 2009 -a 28% decline from peak to trough-, that’s quite a significant change in trend.

Even if the House Price Index for the rest of the year shows the Spanish property market bumping along the bottom at the current levels, many people will be relieved to have actually found the bottom – rather than worrying about how much worse things can get.

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June 9th, 2009

The Spanish house price index figures for May 2009 have just been released. See the graph and the table below for an up to date overview of the real estate market trend in Spain.

Spanish House Price Index May 2009 (C) Montes de Malaga Real Estate

Spain Coastal Inland
05-2008

06-2008

07-2008

08-2008

09-2008

10-2008

11-2008

12-2008

01-2009

02-2009

03-2009

04-2009

05-2009

-2.0

-2.5

-3.9

-4.6

-4.9

-6.5

-7.8

-8.8

-10.1

-9.0

-9.7

-10.1

-9.8

-3.2

-3.0

-6.2

-8.3

-5.3

-8.9

-8.5

-14.3

-12.6

-10.7

-11.5

-13.5

-12.8

-0.7

-0.5

-3.1

-1.0

-1.7

-5.3

-6.3

-6.6

-10.0

-7.9

-8.9

-8.9

-8.7

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June 3rd, 2009

Euribor (12 months), the interest rate normally used to calculate mortgage payments in Spain, fell from 1.771% in April to 1.644% in May, a percentage change of -7.2% month to month, and -67% year to year.
After eight consecutive monthly declines, repayments on the average annually resetting mortgage based on Euribor will fall by 2,280 Euros a year.

According to the National Institute of Statistics, the average Spanish mortgage is 119,000 Euros, Euribor +.075%, with a 26 year term. Monthly repayments on mortgages resetting to May’s Euribor will fall by 223 Euros to 512 Euros per month, a major relief for many of Spain’s hard pressed borrowers.

Euribor has started June with further falls.

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