Spanish Home Prices Register First Quarterly Gain Since 2010Sharon Smyth
Home prices in Spain rose in the third quarter for the first time since 2010 as the economy came out of a two-year recession.
Prices rose 0.7 percent from the previous quarter, the first increase since the second quarter of 2010, Spain’s National Statistics Institute in Madrid said today. Prices fell 7.9 percent from the year earlier period.
Spain’s economy emerged from a two-year recession in the third quarter as household spending grew for the first time in more than a year, data showed last month. The government forecasts that economic growth next year will be strong enough to create jobs, even as the International Monetary Fund predicts the unemployment rate won’t fall below 25 percent until 2018.
“This data may give a false sense that prices have bottomed out when all the fundamentals of the market continue to indicate the contrary,” said Fernando Encinar, co-founder and head of research at Idealista.com, Spain’s largest property website. “An excess of euphoria could further delay necessary price drops that are needed for the housing sector to recover.”
Encinar said prices rose in the second quarter of 2010, but that increase didn’t “materialize into a change in tendency.”
Home sales in Spain fell 10 percent in October from a year earlier and dropped 4.4 percent on a monthly basis, according to data released by the INE on Dec. 12.
Fewer than 15,000 mortgages were granted in September compared with about 129,000 at the September 2005 peak, according INE data. Home prices have fallen by an average of 41 percent since their high point in 2007, according Fotocasa.es and the IESE business school.