Spain's house prices fell 5.7pc in November as recovery proves fragile

MADRID: House prices in Spain fell 5.7% in November compared to the previous year, the College of Notaries said on Thursday, as the coronavirus pandemic has depressed the real estate market and sellers lowered expectations amid a swelling housing stock.

Although Spaniards took out 6.7% more mortgages in November than in the same month of 2019, the data showed, mortgages' average value fell by 2.7%, as property prices dropped, buying power shrank and banks tightened lending policies.

With tourism limited and much of Spain's activity shifting online, the coronavirus has reduced demand for rental accommodation, two of Spain's largest property portals said earlier this week, forcing landlords to either lower rents or sell, which has dragged house prices down as the stock grew.

The amount of rental homes available was 78% higher at end-2020 than when the year began, property portal Idealista said on Tuesday, meaning rents in once red-hot real estate hubs like Madrid and Barcelona fell by 7.3% and 9.4% respectively.

Meanwhile, the average budget for rent declined 6.4% in Madrid and 11.6% in Barcelona between March and December, Fotocasa, another online real estate portal, has said.

It registered similar falls in rental prices for both cities in 2020.

Earlier this week, Spain's Registrars - who oversee transfers and certifications of real estate - noted that the number of mortgages taken out in November was the only positive annual variation since the pandemic struck, and followed six straight months of losses.