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.