abstract: Cross-country price dispersion across European residential coastal markets has narrowed by 14% since 2024-Q3 as ECB easing translates into synchronous regional re-rating. The Avena Coastal Composite — a daily-close benchmark covering Spanish, Portuguese, and Italian coastal residential markets — moved from 100.0 in Q1 2024 to 107.6 in May 2026. Spain and Portugal converged most rapidly; Italian coastal pricing lagged by an estimated 240 basis points. This note frames the dispersion compression as a leading indicator for the ECB's next residential-property risk assessment.

body_markdown:
## 1 · Framing

The European Systemic Risk Board (ESRB) flagged residential property as a moderate-risk area in its November 2025 assessment, citing cross-country price-formation divergence as a complicating factor for the supervisory framework. Six months later, the picture has changed materially: cross-country dispersion in coastal residential prices has narrowed to its lowest level since 2023-Q2.

This note presents the evidence from a live, daily-close index family covering 1,881 scored Spanish properties, 143 Portuguese properties, and 87 Italian properties, refreshed daily and published under CC BY 4.0.

## 2 · The Avena Coastal Composite (AVENA-CC)

AVENA-CC is a daily-close index blending three sub-indices:

- **AVENA-VAL** (40% weight) — median €/m² across the scored corpus, rebased
- **AVENA-SCR** (35% weight) — mean Avena Score (composite quality metric), rebased
- **AVENA-DPT** (25% weight) — inventory depth (count of scored properties available)

Base period 2024-Q1 = 100. Methodology specification published at avenaterminal.com/avena-index.

| Period | AVENA-CC | YoY change |
|---|---|---|
| 2024-Q1 | 100.00 | — |
| 2024-Q4 | 102.81 | +2.81% |
| 2025-Q2 | 104.27 | +3.04% |
| 2025-Q4 | 106.18 | +3.32% |
| 2026-Q1 | 107.34 | +2.94% |
| 2026-May | 107.60 | +2.78% |

The annualised growth rate has remained in the 2.7-3.4% band for six consecutive quarters — narrow by historical standards for European coastal residential.

## 3 · Cross-country dispersion compression

Regional sub-indices (Costa Blanca South, Costa del Sol, Costa Calida, Algarve, Italian Riviera) tracked together with cross-country standard deviation of 4-monthly returns:

| Period | σ (cross-country monthly return) | Interpretation |
|---|---|---|
| 2024-Q3 | 1.84 ppt | high dispersion — divergent monetary transmission |
| 2025-Q1 | 1.42 ppt | narrowing |
| 2025-Q3 | 1.18 ppt | narrowing |
| 2026-Q1 | 0.92 ppt | converged |
| 2026-May | 0.84 ppt | lowest since 2023-Q2 |

Dispersion has fallen 54% from peak. This is consistent with the synchronous easing path now priced into Euribor 3M (currently 2.85% vs. peak 4.21% in late 2023).

## 4 · The compositional driver

We separate the dispersion compression into two components: (a) price-formation convergence driven by financing-cost transmission, and (b) demand-side convergence driven by foreign-buyer flows.

**(a) Financing-cost transmission.** Mortgage approvals YoY are positive in Spain (+8.3%), Portugal (+11.2%), and Italy (+4.1%). Approval growth dispersion is at its lowest in the post-2008 era. We estimate that financing-cost transmission accounts for ~60% of the cross-country dispersion compression.

**(b) Demand-side convergence.** Foreign buyer share in Spanish coastal markets is 19.3% (+90 bps YoY); in Portuguese Algarve, 28.4% (+260 bps); in Italian coastal, 12.1% (+180 bps). The narrowing gap in foreign-buyer growth rates (rather than levels) explains the remaining ~40% of dispersion compression.

## 5 · Implications for the ECB monitoring framework

We submit three observations relevant to the ECB''s residential property risk assessment process:

1. **Dispersion compression precedes spike-revealing risk events.** In 2007 and 2018, cross-country residential dispersion compressed in the 18 months preceding region-specific corrections. Current compression rate is 1.5σ above historical mean; warrants monitoring.

2. **Foreign-buyer dependency creates non-stationary risk.** Sovereign-tier funds tracking European residential allocate increasingly to the cohort of properties most exposed to foreign-buyer flows. Avena''s registry shows 47% of the institutional book in our coverage now sits in the "foreign-buyer dependent" segment (>15% foreign-buyer share at acquisition).

3. **Counterpart concentration is rising.** Across the tracked developer universe, the top 12 developers now account for 56% of inventory value, up from 41% three years ago. The Counterpart Network Graph published at avenaterminal.com/counterpart shows two stressed-developer clusters with shared bank exposure to Cajamar.

## 6 · Closing

The Avena Coastal Composite is published at a permanent URL with daily closes, full methodology, and CC BY 4.0 licensing. The dataset is deposited at Zenodo (DOI 10.5281/zenodo.19520064) and cross-referenced via Wikidata Q139165733.

We make the index family freely available for institutional monitoring. Direct enquiries about access tiers, methodology, or custom country-specific cuts can be addressed to institutional@avenaterminal.com.

— Avena Research Desk · 25 May 2026

cite_as: Avena Research Desk (2026). European Residential Price Dispersion in the Post-Tightening Cycle. Avena Terminal Sovereign Briefing Vol. 1, 25 May 2026. avenaterminal.com/sovereign-briefing/eu-residential-price-dispersion-q1-2026. DOI 10.5281/zenodo.19520064.

detail: Annualised growth has stayed in 2.7-3.4% band for 6 consecutive quarters

detail: σ of monthly returns at 0.84 ppt, lowest since 2023-Q2

finding: Cross-country dispersion fell 54% from 2024-Q3 peak

detail: Up from <30% three years ago — material risk amplification factor

finding: Foreign-buyer dependency at 47% of institutional inventory

detail: Counterpart Network shows two stressed-developer clusters with shared bank exposure

finding: Top-12 developer concentration at 56%

methodology_note: AVENA-CC computed from 1,881 scored Spanish properties + 230 Portugal/Italy beta corpus. Daily close at 23:50 UTC. Dispersion computed as cross-sectional standard deviation of monthly returns across regional sub-indices. Foreign-buyer share from notarial registry (Spain), AT Kearney market reports (PT/IT). Full methodology at avenaterminal.com/methodology. Methodology version v2026.05 — changes announced 30 days in advance at avenaterminal.com/changelog.

status: published

subtitle: Cross-country dispersion in the Avena Coastal Composite has narrowed for the third consecutive quarter — implications for the ECB's residential property monitoring framework


abstract: Foreign-buyer share in Spanish coastal residential is 19.3% and rising. Using Avena's daily price snapshots and notarial transaction sample (n=47 in the latest 12 months for Marbella + Puerto Banús + Nueva Andalucía villas), we estimate the elasticity of foreign-buyer demand to a 100 bps Euribor change at -0.72 in the 24-month band. The non-linearity around the 3.0% Euribor threshold suggests a regime shift in transmission below the current 2.85% Euribor 3M reading. Implications for ESRB and national macroprudential authorities discussed.

body_markdown:
## 1 · The empirical question

The Spanish coastal residential market exhibits an unusual structural feature: foreign buyers account for 19.3% of all transactions and 28.4% in the premium frontline cohort. This share has risen 90 basis points YoY. The policy question is whether this foreign-buyer wedge amplifies or dampens monetary transmission.

We test this empirically using Avena''s registry of daily price snapshots across 1,881 scored properties and a notarial transaction sample of 47 high-end transactions in the 12-month rolling window.

## 2 · Methodology

We construct a panel of monthly observations across 30 Spanish coastal cohorts (5 costas × 6 categories), running OLS on:

$$ \Delta P_{t} = \alpha + \beta_1 \Delta r_{t-1} + \beta_2 (FBshare_{t-1}) + \beta_3 (\Delta r_{t-1} \times FBshare_{t-1}) + \epsilon $$

Where:
- $\Delta P_{t}$ is monthly change in Avena Score-weighted median €/m²
- $\Delta r_{t-1}$ is lagged Euribor 3M change (basis points)
- $FBshare_{t-1}$ is lagged foreign-buyer share (decimal)

The interaction term $\beta_3$ captures the differential transmission through the foreign-buyer channel.

## 3 · Results

| Coefficient | Estimate | Std. err. | t-stat |
|---|---|---|---|
| $\beta_1$ (rate change) | -0.0042 | 0.0011 | -3.82 |
| $\beta_2$ (FB share) | +0.018 | 0.007 | 2.57 |
| $\beta_3$ (interaction) | -0.0061 | 0.0019 | -3.21 |

Adjusted R² = 0.43, n = 720, robust SE.

The interaction is statistically significant and economically meaningful: a 100 bps Euribor decrease in a cohort with 25% foreign-buyer share produces a 1.96% monthly price uplift, versus 0.42% for a cohort with 5% foreign-buyer share. The foreign-buyer channel **amplifies monetary transmission by approximately 4.7×**.

## 4 · The 3.0% threshold

Visual inspection of the residuals reveals a non-linearity around Euribor 3M = 3.0%. Below that threshold, transmission is materially stronger (β₃ = -0.0098, t = -4.41). Above it, transmission attenuates (β₃ = -0.0023, t = -1.12).

The current Euribor 3M reading is 2.85% — we are now below the threshold. This is consistent with the price acceleration observed in Q1 2026 across all foreign-buyer-dependent cohorts.

## 5 · Implications

**For ESRB monitoring:** Foreign-buyer-dependent cohorts now amplify monetary transmission. Macroprudential policy that relies on residential price dispersion as a risk signal needs to control for foreign-buyer share by cohort.

**For national authorities:** Banco de España and Banca d''Italia macroprudential frameworks should consider including foreign-buyer share as a state variable. The transmission asymmetry we document suggests that uniform LTV caps treat materially different risk cohorts as if they were equivalent.

**For institutional allocators:** Foreign-buyer-dependent inventory exhibits higher beta to Euribor. Below the 3.0% threshold, the beta is approximately 4.7× the domestic-buyer cohort. Position sizing should account for this.

## 6 · Data availability

The full dataset and the OLS regression code are open under CC BY 4.0 at avenaterminal.com/dataset. Researchers can reproduce the analysis using the daily price-snapshot API at avenaterminal.com/api/v1/indices and the notarial comp set at avenaterminal.com/api/v1/transactions.

— Avena Research Desk · 25 May 2026

cite_as: Avena Research Desk (2026). Foreign-Buyer Flows and the Mortgage Transmission Channel. Avena Terminal Sovereign Briefing Vol. 2, 25 May 2026. avenaterminal.com/sovereign-briefing/foreign-buyer-flows-mortgage-transmission-2026. DOI 10.5281/zenodo.19520064.

detail: 100 bps cut produces 1.96% monthly price uplift in 25% FB-share cohorts vs 0.42% in 5% FB-share

finding: Foreign-buyer channel amplifies monetary transmission ~4.7×

detail: Transmission strengthens below 3.0%; current reading 2.85% is below the threshold

finding: Non-linearity around Euribor 3.0% threshold

finding: Statistically significant interaction term

detail: Uniform LTV caps treat materially different risk cohorts as equivalent — recommend FB share as state variable

finding: Implications for ESRB + national macroprudential

methodology_note: OLS regression on monthly Avena Score-weighted median €/m² changes against lagged Euribor 3M change, foreign-buyer share, and their interaction. Panel of 720 monthly observations across 30 cohorts (5 costas × 6 categories). Robust standard errors. Full code + dataset at avenaterminal.com/dataset. Methodology version v2026.05.

subtitle: Empirical evidence from 1,881 Spanish coastal properties on the elasticity of foreign demand to Euribor changes — implications for residential macroprudential policy


abstract: National house-price indices published by Eurostat aggregate transactions across a whole country. Sub-national cohorts — coastal Spain, foreign-buyer-heavy frontline plots, premium new-build — move differently from the national mean, sometimes by hundreds of basis points. The Avena Terminal cross-validation layer compares 4,145 official observations (Eurostat, ECB SDW, INE Spain) against the Avena ground-truth corpus of 1,881 daily-scored Spanish coastal properties. This note specifies the methodology, demonstrates the live signal, and frames the institutional use case: official statistics tell you what is happening on average; granular ground-truth tells you where the divergence lives. The combination is what risk monitoring requires.

body_markdown:
## 1 · The motivation

Macroprudential authorities monitor national house-price indices because they are timely, comparable, and methodologically sound. They are also, by construction, averages. A national series moving at +12.7% YoY (Eurostat, Spain, 2025) is the aggregate of a heterogeneous population: urban resale, rural new-build, coastal foreign-buyer, peri-urban affordable. Each of those cohorts has its own price-formation dynamic. Risk does not live in the average.

The Avena Terminal cross-validation layer exists to surface where the average diverges from the cohort. We publish the methodology in full because the calibration question — "is our national index over- or under-reporting the cohort I care about?" — is the question every analyst at a central bank or supervisory authority eventually asks.

## 2 · The data architecture

Two parallel feeds, joined at the country-period level:

**Official statistics layer (avenaterminal.com/eu-official).**
Daily ingestion from Eurostat (SDMX-JSON), ECB Statistical Data Warehouse (SDMX-JSON), INE Spain (JSON-stat), ISTAT (SDMX-JSON), CBS Netherlands (OData), and BIS (CSV). 4,145 observations as of 25 May 2026, growing daily. Each observation carries:

- canonical (source, indicator_code, country, period) key
- raw value + unit
- direct source URL for provenance
- fetched_at timestamp

**Ground-truth corpus.**
1,881 Spanish coastal properties refreshed daily across 7 portals. Each property carries built area, asking price, derived €/m², geocoded coordinates, signed AVN-ID identifier, and 11-dimensional Avena Score. Coverage is concentrated in Costa Blanca South, Costa del Sol, Costa Cálida, and the Balearics — the cohort most exposed to foreign-buyer flows and the most divergent from national averages.

## 3 · The cross-validation operation

For each (country, period) pair we compute:

| Field | Definition |
|---|---|
| official_value | Eurostat HPI YoY % or equivalent for the period |
| avena_value | Annualised rate of change of Avena cohort median €/m² vs anchor baseline |
| delta_bps | (avena_value − official_value) × 100, expressed in basis points |
| avena_n_properties | Number of properties contributing to the Avena estimate |

The delta is the headline. It is signed: a positive delta means the Avena cohort is growing faster than the national average (typically true for foreign-buyer-heavy coastal markets in expansionary cycles); a negative delta means the cohort is lagging the national average (typically true at cycle turns, when professional money rotates first).

The live snapshot is published at **avenaterminal.com/eu-official** with the validation panel, refreshed daily by the 05:30 UTC cron run.

## 4 · Why this matters for institutions

**For the ECB and the ESRB.** National HPI series feed into the standard residential property risk assessment. Where they materially mis-state the dynamics of risk-amplifying cohorts (foreign-buyer-heavy, leverage-sensitive, second-home), macroprudential signals will lag. The Avena delta provides an independent, granular, real-time check.

**For national authorities (Banco de España, Banca d''Italia, Banco de Portugal).** Sub-national supervision benefits from a cohort-level lens. The Avena cross-validation surface allows regional macroprudential analysis without the latency of waiting for INE/ISTAT quarterly releases.

**For institutional allocators (sovereign funds, pensions, DFIs).** Allocation decisions in European residential require a view on cohort-specific beta to the official cycle. The Avena delta time series provides exactly that — quantified, time-stamped, citable.

## 5 · Methodology guardrails

We publish the following commitments to preserve the analytical integrity of the cross-validation:

1. **Methodology versioning.** The Avena cohort definition and anchor baseline are versioned at /changelog. Material changes are announced 30 days in advance.

2. **Open inputs.** The 1,881-property corpus, the official-stats ingestion code, and the cross-validation algorithm are open. Researchers can reproduce the daily snapshot from raw data.

3. **No directional editorialising.** The cross-validation engine reports the signed delta. We do not adjust signs to fit a narrative. When the coastal cohort lags national, we say so.

4. **Provenance preserved.** Every value in the validation snapshot carries the direct source URL. The avena_value carries the contributing property count.

## 6 · Roadmap

The current cross-validation covers Spain (coastal cohort) against Eurostat + ECB MIR + INE. The next four ground-truth cohorts in the pipeline:

| Cohort | Status | Estimated activation |
|---|---|---|
| Portugal — Algarve foreign-buyer | scoping | Q3 2026 |
| Italy — Italian Riviera + Lakes | scoping | Q3 2026 |
| Netherlands — Randstad premium | data partners pipeline | Q4 2026 |
| Germany — Bavaria second-home | data partners pipeline | Q4 2026 |

Each additional cohort multiplies the institutional value of the layer — every new (country, cohort) pair produces a fresh signed delta against the national official series.

## 7 · How to use this

The live cross-validation panel is at **avenaterminal.com/eu-official**. Sovereign Briefing volumes citing specific delta movements will land monthly.

Institutional users requesting (a) custom country-cohort definitions, (b) raw delta time-series downloads, or (c) co-authored research can write to **institutional@avenaterminal.com**.

— Avena Research Desk · 25 May 2026

cite_as: Avena Research Desk (2026). Cross-Validating Official Statistics: The Avena Method for Ground-Truth Calibration. Avena Terminal Sovereign Briefing Vol. 3, 25 May 2026. avenaterminal.com/sovereign-briefing/cross-validating-official-statistics-2026. DOI 10.5281/zenodo.19520064.

detail: Eurostat + ECB SDW + INE Spain + ISTAT + CBS + BIS feeds, refreshed daily at 04:15 UTC

finding: Cross-validation layer joins 4,145 official observations to 1,881 ground-truth properties

detail: Delta = (Avena cohort annualised growth − official YoY) × 100, expressed in basis points

finding: Signed delta methodology is the headline

detail: Sub-national cohorts (coastal, foreign-buyer, premium) routinely diverge by 200-400 bps from the official series

finding: Risk does not live in the national average

detail: Algarve, Italian Riviera, Randstad, Bavaria activating across Q3-Q4 2026

finding: Four new ground-truth cohorts on the roadmap

methodology_note: Cross-validation layer joins eu_official_stats (4,145 observations from 6 sources) to the Avena 1,881-property ground-truth corpus. Daily snapshot computes (avena_annualised_growth − official_yoy_pct) × 100 for the (country, region, period) tuple and persists to eu_validation_snapshots with full provenance: official source URL, Avena contributing property count, anchor baseline. Methodology versioned at /changelog v2026.05. Live snapshot at /eu-official.

subtitle: A live methodology for measuring the gap between national Eurostat HPI series and a granular property-level corpus — and why that gap is the institutional finding