Spanish real estate prices decreased at a greater rate for Q2 and many analysts believe that prices have not hit the bottom because of current massive levels of housing stock and the possibility of a long, drawn out recession.
Real estate prices dropped by 7.7% year on year during Q2, as shown by data released on Wednesday, this continues with the picture of decreasing prices and the worsening of figures compared to that of the previous quarter, between January and March.
Q2 real estate prices fell by 0.4% on a quarter upon quarter snapshot of the market, compared to a 2.7% drop in Q1, as shown by the National Statistics Institute.
The cost of new real estate fell by 3.9% year on year, this shows the second consecutive quarter of price falls. Second hand real estate prices declined by 11.2%, slowing from the previous fall of 12.5% in Q1.
There are continued expectations of a long, drawn out recession, unemployment figures are at a rate more than double the European average and brand new property stock piles compare to that of considerably bigger economies. This will probably result in the real estate market being in a decline for some time to come.
Property values have decreased by much more stringent mortgage lending, this dropped by 33.9% in the month of July, and property sales are showing as 20.3% less than the same period year on year.
Our opinion as a company based on the actual market conditions we are experiencing, is that although there are some large price decreases in the current market. This is due to vendors being more flexible, however well placed properties are seeing less of a price correction.
There is now a gulf in many purchasers expectations for a bargain and what people are prepared to sell at, this I feel will result in disappointment moving forward. There are some great bargains around currently but if you are a buyer now, expect to compromise on your criteria if you want a deal.
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