One company is using open data published by the government to help foreign buyers make savvier decisions about what and where to buy
The first time Lawrence Wood visited Lanzarote the Spanish dictator Francisco Franco was still in power. In 1968, the Spanish island represented a different proposition to investors.
“A former employer was renovating an old camel stable in La Asomada,” recalls Wood, who instantly fell in love with the island. His old boss offered to sell him a patch of the land, but it wasn’t until the early 1980s that he took him up on his offer and started building his future home.
Wood now considers the move the best decision he ever made, but readily admits that it was a huge financial gamble: “I got lucky.” Others have been less fortunate.
In 2008, the ripples from the US banking and subsequent housing crash were starting to be felt across the world as property prices tumbled. In Spain, Barcelona and the surrounding Catalonia region were one of the worst hit. Prices nosedived. By 2013, property values had nearly halved.
In the Valencia region prices fell drastically. Conor Wilde, managing director of property agent Found Valencia, says: “A lot of people lost a lot of money in the late 2000s. Some people went too far and invested too much.”
Wilde blames a lack of buyer understanding. Despite advice to the contrary from agents, he says, many buyers ploughed money into properties and regions without knowing enough about the market.
This supposed dearth of local knowledge for overseas property investors is an underlying reason why one company decided to explore the use of Spanish government open data to help its users make more informed purchasing decisions. That’s its mission statement anyway.
Kyero has been helping its customers sell Spanish property online since 2003. It has been referred to as the Rightmove of Spain although Rightmove itself has recently set up shop in the region to compete. The decision to investigate Spanish open data was driven not so much by the data itself but, says the company’s CEO and founder Martin Dell, to solve a consistent problem.
“The Spanish property market is heavily reliant on foreign buyers, and if you were to paint a statistically typical picture of those buyers, they’d be a married couple in their 50s whose dream is to spend their latter years in the sun,” says Dell. “While this is great, it is also this demographic that tends to take the most risk with investments.”
It was an ambitious project as not all data sets were easy to find or in a condition that was conducive to easy reading, says Richard Speigal, head of research at Kyero and architect of the Data.kyero.com site.
Spain started regularly publishing open data sets in 2013 and is now ranked 17th in the Global Open Data Index. It has a number of datasets published on sites such as the Instituto Nacional de Estadistica and Data.gob.es, but while inconsistencies have made the project challenging, Speigal says the data is improving quickly.
“We’ve now pulled in registrar transaction volumes, mortgage lending and the house price index as core data, and have added unemployment as a proxy for local economic strength,” he says. “There’s more to come too. Airport arrival data is a proxy for sentiment, and we also have bathing water quality to show the best beaches. We just keep lifting stuff when it answers a question.”
So what impact is this having if any? The data site only went live towards the end of last year but Wilde is convinced it can only improve business.
“Buyers will be better educated about pricing and areas they can and cannot afford,” he says. “It won’t speed up the sales process but it could make buyers more realistic.”
It could also help to kick-start unfinished building projects if demand returns to pre-2007 levels, he adds, because the data could help identify up-and-coming areas where prices are low but land is ripe for longer-term investment. Although Wilde says there are still a lot of half-built properties around there is certainly optimism in the region, as overseas buyers, particularly from the UK are returning to the country – purchases by overseas buyers accounted for 18.41% of all transactions in Spain in the second quarter of 2015, according to Kyero.
So what next for the data? Speigal says that the company has been approached by a number of agents to produce data cards for specific areas or regions. The company is also working on making the data simpler to understand and helping local businesses improve their chances of sales.
While open data will not rescue this market from its deep recession and safeguard it from future crashes, it could prove to be a catalyst for a revival. Wilde and Speigal both accept that confidence needs rebuilding in Spain and this sort of information could be vital.
Santos Gonzalez, president of Asociación Hipotecaria Española (AHE), Spain’s national mortgage association, agrees.
“The more information available and the more transparent the markets, the better informed buyers will be,” he says.
Peter Robinson, CEO of the Association of International Property Professionals, adds that as long as the data is easily accessible it “can only help in bolstering the rising levels of consumer confidence we are seeing in the overseas property market”.
He says that the provision of accurate and more in-depth property data can only be a good thing, but is it enough to stop what he refers to as cavalier buyers who consistently “check their brains in at the airport”? It’s still early days but that’s surely the biggest challenge for open data and companies such as Kyero.
(This article first appeared on The Guardian)