Buying a Property in SpainCampbell D. FergusonChartered SurveyorsSpanish propertySurvey Spain

IMPORTANT Incorrect house value statistics are bringing Spain down! International perceptions are affecting the country to its cost in billions

By February 5, 2013 No Comments

1. FACT – true prices paid for houses have fallen 50% or more in most areas of the country and NOT the 30% shown in the registrar’s statistics.

2. CAUSE – Traditionally the full price paid for a property was not shown in the official sales document, with as much as 30% being in cash ‘under the table’. Thus the register shows low values. However, stronger disciplining of money laundering, etc, has meant that the registered prices are probably now only 10% down on the real total money exchanged.

3. RESULT – So registered prices should appear to be rising by 20%. However, as prices have in fact fallen 50+%, the registered prices show an incorrect statistic of -30%.

Even analysis of Asking prices, which should avoid the above problem, fails the accuracy test. In ‘good’ times, buyers paid the price asked as they knew it would be higher a few months later. Now, with so much supply chasing so little demand, combined with historic prices still being quoted, actual sale prices are negotiated down to 10 – 20% less than the average asking price. So once again, the asking price stats can show a reduction of 30%, when the actual reduction has been 50%.

I’ve Blogged on this subject previously, but I feel that it’s so important for Spain and its economy that the international market needs to be aware of the true situation. There is no further 20% drop in house prices to come as its already happened -(always assuming that SAREB, the Bad Bank, doesn’t do anything silly!)