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Friday 3 October 2008

Spanish property Prices and the Canary Islands

Kyero announces new data on Spanish property prices showing the Canary Islands increasing in the top 10 regions of Spain with Gran Canaria showing an increase of 39.9% and Fuerteventura showing a 10.5% increase and claiming two of the top three positions, which substantiates the recent report by Tinsa showing that the Canary Islands was fairing much better than mainland spain regarding property prices and showing that the islands are always a safe haven in the times of crisis.

Overall, the average house price in Spain appears to have increased from €240,000 to €245,300 - in just three months. In the current market conditions, how can an apparent increase in house prices be explained?
Digging a little further, the overall increase can be narrowed down to 10 provinces which have experienced sizable quarterly increases themselves.
Provinces increasing in price Q3 2008

Province Qtr increase Yrly increase
Gran Canaria +39.9% -2.3%
Girona +17.9% +10.8%
Fuerteventura +10.5% -12.7%
Albacete +10.4% +8.0%
Cadiz +6.3% +1.8%
Malaga +4.3% +1.4%
Pontevedra +3.3% +13.0%
Granada +2.2% -0.1%
Mallorca +2.0% +9.4%

In six of the ten cases, the apparent increases can be explained by a lack of representative data, as detailed below:
Gran Canaria - Canary Islands: Suspiciously low figures for Q2 makes Q3 look like a growth quarter - although Q1 to Q3 trend is more or less flat.
Girona - North-east Spain: Insufficient data for all sizes of property
Fuerteventura - Canary Islands: 1 bed properties decreasing slightly, 2, 3 & 4 bed properties increasing.
Albacete - Central Spain: Insufficient data for all sizes of property
Asturias - Northern Spain: Insufficient data for all sizes of property
Cadiz - Southern Spain: 1 bed properties reducing in price, 2 bed properties holding steady, 3, 4 & 5 bed property prices all over the place.
Malaga - Southern Spain: Apparent growth on 2,3,4,& 5 bed properties.
Pontevedra - North-west Spain: Insufficient data for all sizes of property
Granada - Southern Spain: Marginal apparent growth on some sizes of property skewing the overall average
Mallorca - Balearic Islands: Apparent growth on 2,3,4,& 5 bed properties.

However, this still leaves 4 provinces where the apparent increase in price cannot be explained by a lack of statistical relevance. After double and treble-checking the price calculations, there appear to be no errors.

Exactly why asking prices in Fuerteventura, Cadiz, Malaga & Mallorca appear to be growing is a mystery to me. If you have an opinion on one of the above provinces, please select any of the above links and leave your comments using the form at the bottom of each page. In the meantime, I'll carry on routing around for an explanation.

This reminds me of when slide-rules were introduced to maths lessons at school (yes, I'm that old). What always baffled me about those calculator pre-cursors was that you needed to have a rough idea of the answer before using the contraption in the first place. So, with house price statistics, we question them only when they don't fit with our gut-feel of what the numbers should be.

Martin Dell,

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