Prices down 11.5% on the Costas

Properties along Spains Mediterreanan coast (Costa Brava, Costa Dorada, Costa del Azahar, Costa Blanca, Costa Cálida, Costa de Almeria, Costa de Granada, Costa del Sol and Costa de la Luz) are down 11.5% in March 2009 year-on-year. But before anyone complains to me about ‘doom & gloom’, I am actually quite pleased about this information!

Understandably any drop in price is generally seen in a bad light, but considering the unprecedented situation will all find ourselves in, it is not unexpected. Especially since every news report about property prices here in Spain or indeed anywhere are about falling values, people unable to sell, etc… And when you are bombarded with such negative information for long enough you start to believe it. I have even noticed that several British online sites, the Independent, telegraph, etc.. have become more upbeat after realising that they have shot themselves in the foot by publishing such negative reports (less advertisers) all the time.

Back on point, why am I pleased? Well when I read the IMIE index (produced by TINSA) for January, the report claimed that prices were down year on year 12.6%. Not good. The following report for February gave a year on year figure of -10.7%, not good but alot better than January, and now for March the figure is -11.5% for prices along the Mediterranean coast.

By comparison year on year price changes for the last 3 months for all of Spain have been January: -10.1%, February: -9.0% and March: -9.7%

Anyway back to the Mediterranean coast. What these figures tell us, is that we might finally be seeing the  market is bottoming out. We are of course talking about a huge area that these percentages are referring too, and without banks lending at the previous rates, vendors will still be expected to make reductions on selling prices. But if this trend continues we might see prices stabilize at around 11.9% lower than they were last year with prices creeping up at the end of 2009 or by mid-2010. Of course this will vary from Costa to Costa and from town to town. And of course this does not take into account all the different ways our beloved governments are trying to spend our money which we all hope will jump start the market. But either way, without being overly optimistic, we might finally be seeing the light at the end of the tunnel.

Andrew Belles
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