Spain statistics

In a previous article I have mentioned that many properties on the Costa del Sol have had their prices raised after a certain period in the market. I wondered what the price path was for properties which actually got sold - it's one thing to raise the asking price of a property but another to sell it at that.

My data sample involves 590 properties that had at least 1 price change through their life on the market, and which then went on to get sold in 2016/17 for that last price point. Not a massive data sample but it spans a wide range of locations, it comes from various agents, and it covers all property types. I was not expecting this:

1. How many decreased vs. how many increased

A whole 33% of the properties sold at a higher price than their initial one! Half of those properties were on the market for less than 300 days - not an unreasonable amount of time to wait for a sale. The midpoint house/apartment/villa was on the market for 251 days.

2. The maximum amount of a price upward change

The top 3 upward price changes were for villas in Nueva Andalucia where the maximum upward price revision was ... 510,000 euros, a 30% increase for that particular property. Of course Nueva Andalucia has some very desirable properties but it is striking that 9.6% of the upwardly-revised properties (not only villas) were located there. Next best locations were Guadalmina and Fuengirola.

3. Similar time on the market

Of course there were also some extremes, for example an apartment in Calahonda had taken 1660 days to sell. However approximately 250 days is what it took for both sets of properties to sell. Which probably means that sellers are not necessarily too desperate to sell, otherwise we would have seen really short periods on the market for properties that were reduced in price, indicating pressure to sell.

My conclusions: despite my average-sized data sample (unfortunately I can only work with the sales price data I have access to), it seems that the desire to get more money for a property is strong. Sellers are willing to change their price upwards and still they manage to only wait a similar amount of time for a sale as the more keen sellers.Long may this optimism last! :-)

The property portal idealista has released some unofficial data for April Spain property prices that show a decrease of 1.3% compared to last year, even though they have increased over the previous month. The official INE organisation has not released its own data yet, but the Costa del Sol is expected to have an increase in general. However, a little data checking never hurt anyone So I have taken our own property data collected every week, and used Mijas villas as a working example because the effect of what I want to show is more pronounced.

It is true that there was a sharp drop of the average price of Mijas villas during the last couple of weeks:

Looking at the number of villas on the market for the same location we see there was a corresponding sharp increase:

So it appears possible that what I mentioned some weeks ago might be happening again - namely, that as owners see rising prices, more and more of them are willing to offer their villa in Mijas for sale. But the average price should not be dropping so much, other things being equal - the point of having an average is that it shouldn't matter how many properties are on the market, the price gets "averaged" out. So I looked at each individual villa price in detail to understand what is happening:

Each data point in the graph above shows the price of that individual villa. As you can see around 80% of the properties are between 400,000 and 1 million euros, and the other 20% are covering a much larger range of 1 m - 2.5 m euros. Could it be that the higher priced properties are being sold fast and therefore the whole "total amount" of euros in the market is dropping? That would explain the average price drop since it is simply the division of (total euro value of properties in the market) / (number of properties).

I cannot offer confidential data but indeed there were a few large amount sales in April of villas in the Mijas area (1.65 m on the 28th, 2.25 m on the 16th, etc) that have therefore brought the average price down, since there are more of the "lower priced" villas left in the calculation. This data is collected from a large agent sample, so even though it is not official, it is quite reliable.

A more accurate indicator is the median property price - I apologise for sounding like a teacher, it is not my intention, just to explain that median is the price of the middle property, i.e. in the graph above half way along the x-axis. For Mijas villas this gives us 695,000 euros for the median villa in Mijas, a level that has been stable for months and even increased slightly (0.1%) over the last month. I.e. if anything this confirms that average prices have wild fluctuations sometimes, even in cases such as these which could be perceived as good news, since higher priced property being sold shows confidence in the market.

In conclusion, I would state that I am guilty of being ever the optimist, including on this occasion where a declining average price actually is due to proportionately more high-valued properties being sold, which might indicate more confident buyers. If you are interested in browsing at the villas in Mijas that I used for this article I leave the link here: https://hbcostadelsolproperties.com/costadelsol/mijas/villa. Thanks for reading.