House prices stabilise in Spain in August, Tinsa reports

Spanish house prices held flat in August compared with July — the first month without further acceleration after a run of consecutive quarterly increases — according to valuation firm Tinsa. Prices are still up 14.9% on a year earlier, some 10 percentage points above inflation, but the pause in month-on-month growth is the clearest sign yet that the pace seen through the first half of the year — which peaked at 15.2% annual growth in the second quarter — may be starting to level off.

The slowdown was not even across the country. It was sharpest in the islands and in capital and large cities — precisely the areas where prices and buying effort are already most stretched, according to Tinsa's research director, Cristina Arias. Island prices fell 0.9% in August alone, the steepest monthly drop of any region tracked.

Coastal and metropolitan markets told a different story. The Mediterranean coast and metropolitan areas both recorded annual growth of 17.4% in August — comfortably the fastest of any category Tinsa tracks, and well ahead of the 10.2% recorded in smaller municipalities. Even as the market as a whole shows its first signs of catching its breath, the areas most popular with international buyers are still the ones moving fastest.

Arias pointed to a squeeze on household purchasing power as a factor behind the broader slowdown, linking it in part to inflation stemming from the conflict in the Middle East, alongside higher interest rates and continued difficulty accessing housing. Transaction and mortgage volumes moderated in the first half of the year as a result, though both remain above their historical average.

Spain's housing market as a whole is now 2% above its 2007 bubble-era peak in nominal terms, though still 32% below it once inflation over the intervening two decades is accounted for. The islands have moved furthest above their old highs — 25% above 2007 levels in nominal terms, and within 15% of it even after adjusting for inflation, closer than any other part of the country.

For buyers watching the market, the takeaway is a market losing a little of its momentum overall, but not in the places most relevant to a typical international purchase, where growth remains firmly in double digits. Our guide to average property prices by region in Spain has the fuller regional picture.