The average price of a Spanish home fell by 8% in 2011, with further price falls anticipated in 2012, research shows.
The Tinsa House Price Index, considered to be Spain’s most reliable residential property price index, reveals that average home prices fell by 8.1% in 2011, the worst annual decline in property values since 2008, when the average price a home in Spain fell by 8.8% year-on-year.
“There is a clear double-dip in the curve with price falls accelerating again after staging a feeble recovery last year,” said Spanish property commentator Mark Stucklin. The main reasons why home price falls have picked up pace are due to a lack of mortgage finance and a severe oversupply of homes on the market.
Stucklin added: “The double-dip in house prices is mirrored almost exactly by a double dip in new mortgage lending.”
Somewhat surprisingly, homes located in coastal areas, where there is generally the greatest oversupply of properties, finished the year better than other areas, with prices having declined by 7.2%, on average, year-on-year, compared to 9.1% in cities and 8% on the islands such as Tenerife.
