Spanish Regions With House Price Rises

Good news from Spanish real estate is not
often heard these days , however some Spanish regions are doing well with house
prices on the up! Valuation company Tinsa has reported that the Balearic and
Canary Islands are the only regions in Spain where house prices went up in
April over the previous year – an increase of 3.3% versus an average 10.5%
decline for the rest of the country. This corroborates earlier predictions from
Balearics Sotheby’s International Realty.   

Daniel Chavarria Waschke, Managing Director
of Balearics Sotheby’s International Realty with offices in Mallorca and Ibiza,
says, “This is consistent with the market predictions we posted in January this
year when we stated that we had started 2013 with a real sense of
positivity.  We made reference to
the fact that Ibiza had its recovery in 2012, way ahead of the mainland, and
was already ‘booming out’ again. 
Meanwhile we said that demand for holiday homes in Mallorca had remained
high throughout the ‘crisis’ largely due to the mix of nationalities involved,
with more than 80% of buyers non-Spanish. 
We believed that at the top end, the worst was over for Mallorca and
recovery would accelerate in 2013. 
Our crystal ball appears to be spot on with April’s 3.3% house price
increase reflecting that recovery. 
Long may it continue.”

Spain has had a rather tumultuous few years
with Tinsa calculating overall house price falls at 37.2% from peak values in
December 2007 when the bubble burst. 
The mainland Mediterranean coastline is home to the highest falls at
45.1% and the capital and major cities with populations greater than 50,000
next at 40.4%.  The Balearic and
Canary Islands prop up the table with falls of ‘just’ 24.5% from the peak, with
a positive turnaround now on the cards. 
Spain cannot be judged as a whole, but the sum of its parts.

Daniel continues, “Not only is it unfair to
judge Spain as a whole, Mallorca and Ibiza enjoy very different qualities to
the mainland, but it is also important to consider that Tinsa values all
properties for sale, and that includes small apartments with no views or homes
in less exclusive areas of the Islands. 
Our business focuses entirely on the luxury end of the market and I suspect
if we were to carry out the same exercise, the ‘peak to bottom’ price falls
would come out a lot lower than Tinsa’s across the board 24.5%.”

Market recovery may well be accelerated by
Prime Minister Mariano Rajoy’s statement of intent to offer indefinite
residency to foreigners purchasing a home priced in excess of 500,000 euros,
significantly higher than the 160,000 euros first suggested back in November
2012.  A more detailed draft of the
proposal is expected by the summer but there has already been strong interest
from China and Russia, nations keen to access one of Spain’s millions of empty
homes in return for lucrative residence.

This 500,000 euro threshold plays into
Sotheby’s International Realty’s hands as in Mallorca, the Company focuses
exclusively on villas priced above two million euros and apartments above half
a million euros, whilst in Ibiza the bar is set at villas above one and a half
million euros and apartments above one million.  However Daniel is unconvinced that the floodgates will open.