4.2% price increase in August 2019

The following residential property price indices were updated in the third quarter of 2019 (all figures show latest year-on-year percentage change):

• The Ministry of Public Works (Fomento) +3.1% in the second quarter, based on official valuations
• The National Institute of Statistics (INE) index +5.3% in the second quarter, based on data from the Land Registry
• The Spanish Land Registrars’ Association +8.3% in the second quarter, using their ‘repeat sale’ methodology
• The Association of Spanish Notaries index -1%% in July
• The Tinsa index based on property valuations carried out by the company +2.8% in August
• The Idealista.com (property portal) resale asking price index +4.2% in September

This latest data as illustrated in the chart above shows that house prices are still rising according to all sources except the notaries (the most volatile index, as it happens), but all agree that the trend is downwards. This could be a blip but all of them show prices growing at a lower rate than before.

Why might Spanish house prices be cooling, if they are? The Spanish property market is sailing into various global and local headwinds, but one big reason might be slowing demand, with home sales falling 18.6% in June and 20.8% in July, according to the Association of Spanish Notaries.

The global ratings agency S&P forecast that Spanish house price growth will fall from a forecast 5.5% this year to 3.3% in 2022, mainly because of a deterioration in housing affordability that will limit the potential for future price increases. They expect demand to stay strong.