Spain Property Data: Is It Believable or Ludicrous?

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Prodded by a query from a journalist, Kyero.com managing director Martin Dell recently took on the daunting task of analyzing the vast array of conflicting data on the trends in Spanish property.

Eventually he compiled the numbers from 14 different reports tracking the Spanish market, focusing on three main sources--official data, valuation companies and property portals.

Beyond charting the laughable discrepancies in the government data, Dell concluded the "stand-out figure," the one reliable fact, is that the number of property transactions has fallen approximately 56 percent from the peak of Spain's real estate glory years.

The rest of the data is less conclusive, ranging from plausible to ridiculous.

The "most pessimistic" numbers come from Idealista, a property site, which shows prices down about 23.7 percent from the peak. At the other extreme, perkier sources place the drop closer to 7 to 12 percent, a range Dell concludes is "clearly ludicrous, based on personal experience and market hearsay."

The large portals have access to the most data and they place the drop around 22 percent, an average Dell labels the "most realistic" in the report.

"Given that the number of property transactions is down by around 56 percent, it's difficult to see how prices could not have slumped by at least 20 percent as motivated sellers undercut each other to appeal to a reduced number of buyers," Dell says.

Dell found broad inconsistencies in the official government reports. For example, the government agency tracking transactions pegged the peak of the market as the first quarter of 2006, but the Ministry of Housing's data, based on price per square meter, shows the market staying robust until a full two years later (and a slight 10.7 percent decline prices).

If nothing else, Dell says his analysis spotlights a gaping hole in Spain's market.

"What the market needs is for the Spanish government to publish actual transaction prices of individual properties so that the 'hard facts' are available for further analysis," he says. "While this will not reveal the 'actual' price paid for the property in most cases--thanks to a cash element of many property transactions--it will level the playing field."

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