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Why are Spanish national property statistics so wrong?

19/03/2010

The Spanish national statistics office has reported that house prices in Spain have fallen by only 4.8% in 2009. When combined with the approximately 3% that they recorded for 2008 it indicates that the total fall in the market from near it's peak at the end of 2007 has been approximately 8%. How can they be so wrong?

One possible reason for these statistics being completely wrong relates to the information being supplied by the registrars and 'black' money. Traditionally, it is reputed that approximately 30% of the price for any property was paid in cash and not recorded. With the strengthening of money-laundering discipline the prices being recorded are now closer to the full price being paid. In a level market this would have shown an increase of prices of up to 30%. However as the market has fallen by approximately 40%, it is only the difference that is showing i.e. approximately 10%.

The other answer could of course be that the figures are being deliberately manipulated to avoid the assets of the Spanish banks being decimated and many being shown to have failed in the same way as others have done in other countries.

Copyright
Campbell D Ferguson
F.R.I.C.S. Chartered Surveyor
Survey Spain
00 34 952 923 520

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