Video: Evolution of the Spanish Property Price Index (IMIE) from Jan 2000 to April 2020
Evolution of the Spanish Property Price Index (IMIE) from January 2000 to April 2020
The video above shows an animated evolution of the property price index in Spain and some sectors of the Spanish property Market. The source of data is Tinsa, Spain´s leading property valuation company. The racing bar chart is compiled by ourselves.
This can partially help us understand and explain the nature of future price evolutions.
- The global financial crisis of 2007-2008 was the trigger for the property price bear market in Spain. But what is less well known and really surprising (and often overlooked) is that it took no less than 7 years, from 2008 to 2015, for property prices to reach their bottom in a slow but steady decline. Overall, Spanish property prices dropped close to a whopping 50 % in that time span!!
For example: for properties on the Mediterranean Coast, the index dropped from a high of 2600 in 2007 to 1270 in 2015, a decline of -51% !!
- From 2015 onwards, the Spanish property market recovered to the current period of May 2020, right at the start of the Covid19 crisis. Taking the Mediterranean Coast properties again as an example, the recently achieved Index high was 1512, i.e. a growth of +19% (from index low of 1270 to 1512), which is however still well below (almost 40%) the high of 2007.
- Please note, at the time of production of this study, the impact of the covid-19 crisis was not yet visible nor calculable.
- Another phenomenon, not really surprisingly, is the volatility of the price evolution for Mediterranean Coast properties. This geographical sector of the Spanish property market sees outspoken stronger price rises in a booming market, but also the sharpest price drops in a bear market.
- Over the entire time span of 20 years, property price rises in provincial capitals outperformed all other areas in Spain.
- On balance, over 20 years, property prices in Spain rose between 36.8% (metropoles and country side properties) and 65.8% (provincial capitals). Mediterranean Coast properties rose by 47.1%
One could therefore argue, that Mediterranean Coast properties are still an attractive buy, taking specific locations well into account of course. If the coronavirus crisis of 2020 would create a property price bear market, this would present an excellent buy opportunity.
Of course, other factors would have to be taken into account, which will be the subject of future reports.
Banus Immo Marbella
May 2020
