Sales and prices see strong growth in Spain with years of further rises predicted
Residential property sales in Spain have recorded a robust rise of 8.6% in the 12 months to September with prices up 2.4% over the same period, according to the latest figures to be published.
By property type, apartment sales went up by 7.7% and prices by 8.9% but new build sales fell by 1.9% while detached home sales saw an annual increase of 12%, the data from the Association of Spanish Notaries shows.
The average square metre price of properties bought in September was €1,331, some 2.4% higher than the same month last year. The price of detached homes increased by 1.4% and apartments by 3.8%.
It comes at a time when mortgage lending is also rising. The data shows that in September the average loan was €163,330, some 4.6% higher than 12 months earlier while lending to buy a home went up by 8.2% while those for other properties rose by 1.4%.
The six most watched house price indices in Spain are all indicating that the market has recovered. The Fomento index based on valuations was up 2.7% in the third quarter of the year, the Association of Spanish Registrars up 6.82%, Notaires up 2.4% in September, Idealist up 5.6% in November and Tinsa up 4.3% in September.
‘The national indices don’t tell us anything about the direction of prices in local markets, but they do at least give us an idea of where we are in the property market cycle,’ said Mark Stucklin of Spanish Property Insight.
‘Whereas a few years ago they were all in negative territory, they are all now in positive territory and pointing up, showing that the years of price adjustment are behind us,’ he pointed out.
‘Indeed, the price data published in November was the most positive in more than a decade. If the current cycle performs like the past, we can expect several years of rising Spanish property prices ahead of us,’ he added.
Other recent figures reveal that some parts of Spain are seeing robust growth. For example, for a second month in a row, average property prices in Palma de Mallorca were higher than those before the economic crisis.
In October asking prices reached €2,578 per square metre, some 3.4% higher than at the end of 2010, according to the latest report from property portal Idealista. But in some locations prices are still down considerably from their peaks before the economic downturn.
Even in places like Barcelona prices are 8.4% below their peak, in Madrid they are down 20.4%, San Sebastián down 21.5% and Malaga down 25.6% while in provincial capitals such as Lleida, Zaragoza and Castellón prices are still over 50% down.
There are also more new homes being built in Spain, expected to reach 75,000 this year, some 15% more than in 2016, according to an industry sector report by consultants DBK Informa.
The report suggests that the upward trend in the Spanish property market will continue over the short term in the main property market segments, driven by a positive economic situation with more foreign investment coming into property development.