The 5 Stages of Property Price Recovery

So many people are trying to figure out exactly when Tenerife property prices are going to reach the bottom, because that’s the moment when they want to buy. Some choose crystal balls, others soothsayers or astrologers and those with a more exotic approach to planning may even turn to the weird and wonderful world of statistics.  Regardless of which method you choose, at the end of the day it often just boils down to guesswork.  However, armed with an understanding of the 5 stages of house price recovery, you can remove the guesswork and make sure that when you come to buy, you are doing it at the best possible time.

The bargains are selling in some quantity, and although the bottom of the market has been reached, these last bargains force the statistical prices slightly lower as they are sold at prices even lower than market value.

The statistical bottom is reached.  By now almost all the ‘bargains’ (properties being sold below market price) will have been sold.

Prices start to rise, however due to the lag in gathering and reporting statistics (and Spain is worse than most places at this), readers of the press will still be seeing reports showing that the market is still at position 1.

Prices in ‘real time’ are now solidly rising as tentative demand returns.  Press reports now show that the market has reached stage 2, and this will also encourage buyers.  The bargains have all but disappeared.

‘Real time’ prices are now 6 months past the bottom.  Buyers are now seeing stage 3 statistics and for the following months, price rises will accelerate.  Although properties bought in this time will gain in value, clearly those who purchased at stage 1 and 2 will have had the greatest benefit.