Properties For Sale In Spain

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Properties for Sale in Spain and the Positive Influence of Foreign Homebuyers

The Spanish Ministry of Housing indicates that the average price of a Spanish property increased by 12% in nominal terms last year. This means the average asking price of properties for sale in Spain is now €1,888 per square metre, up from €1,685 per square metre. On the surface this is good news for anyone looking to buy properties for sale in Spain.

The difficulty in measuring prices of properties for sale in Spain stems from the flawed methods and incoherent data used by the various sources that compile and publish yearly statistics on the subject.

The official price index published quarterly by the Spanish Ministry of Housing (MiV) is based on figures provided by the Association of Official Appraisal Agencies in Spain (ATASA). This organization is made up of certified appraisal agencies in charge of assessing the value of properties for sale in Spain and compiles data from the appraisals realized by their members.

The first problem with using home appraisals as a means of judging the value of properties for sale in Spain is the fact that not all properties for sale in Spain are appraised during the buying process. Property appraisals are only performed when the buyer requests a bank loan as an aid in the purchase of a home. Although most home purchases do involve some kind of loan, the cases to the contrary constitute a gap in this appraisal-based method of assessing values of properties for sale in Spain.

Investment from foreign buyers relocating, retiring or vacationing in Spain played a crucial role in 2007 values of properties for sale in Spain, as the highest price increases throughout the country occurred in popular overseas property destinations. The highest regional price increase (at 8.1%) took place in Murcia; one of the country’s current hotspots for foreign homebuyers.

Prices actually fell in 11 provinces throughout Spain, with the strongest price drop occurring in Zamora at 5.1%. This again highlights the positive influence of foreign homebuyers, since the entire price drops occurred in areas not targeted by this market.