Value of property in Spain down by 4.9% in September
The Spanish property market continues to be in a state of turmoil. Sales are down, permission for new projects are also down and the value of property keeps on falling. According to statistics by the property valuation company Tinsa the value of property dropped by 4.9% in September alone, a signal that the downward spiral in property prices that started in February this year is continuing.
In fact if the first 9 months of this year are used as a reference the value of property has gone down by 5.9% – this reduction is more pronounced in metropolitan areas where the property boom was most apparent.
In its report Tinsa also highlighted the fact that the stock of unsold properties has risen by 110,000 in the second quarter of this year and now stands at 680,000. According to its calculations the number unsold new housing stock in 2008 is around 930,000 properties.
Furthermore, Tinsa believes that this figure is likely to go up even further until the middle of 2009 and it will take at least two more years for the stock of unsold new flats to be absorbed into the market.
On the other hand, one important factor that affects property sales is the Euribor which has gone down once again. This appears to confirm the downward tendency two days after interest rates were cut to 3.75%. Successive injections of liquidity have also affected this indicator which closed at 5.358% compared to 5.425% yesterday which places it below 5.4% for the first time since the middle of September.
However, the Euribor is still above the levels for this time last year which means that mortgages will go up once again if the reduction in this interest rate index are not consolidated by the end of this month.