Property prices in Spain rose in February as recovery takes hold

The prices of homes in Spain increased by 0.6% in February year on year, taking average values to €1,233 per square meter, according to the latest data from the General Council of Notaires.

Prices are strongest in the single family home sector with growth of 3.8% year on year while the price of apartments fell slightly by 0.2% compared to February 2015.

The average price for single family homes is now €1,007 per square meter, for second hand apartments it is €1,350, up 0.6%, and for new apartments it is €1,619 per square meter, a rise of 0.3%.

At the same time sales are rising steadily, up 22.9% year on year with the growth being led by apartments with transactions in this sector up by 25.9%, the data also shows.

Sales of single family homes also registered a significant increase year on year with growth of 22.6% but new homes are not as popular with transactions down by 5.1%.

The report from the Notaires states that in general terms the figures reflect an underlying trend of recovery.

The recovery is also being reported by estate agents. Barcelona based Lucas Fox International said it recorded a 33% increase in sales in 2015 and much of the growth is coming from Spanish buyers rather than from those from overseas.

Property sales to Spanish buyers were up by 86% year on year, according to the company’s latest market report and it said this is a sign that the Spanish property recovery is well underway.

International buyers, however, continue to dominate high end sales. Some 17% of prime market buyers in Barcelona purchasing property above €950,000 were to national clients compared to 11% the previous year, the majority of whom were purchasing primary residences.

‘The increased market activity by local buyers was the standout trend in 2015. Spanish buyers have been active predominantly at mid end of the market, attracted by property prices at an eight year low, a recovering economy and increased lending from Spanish banks,’ said Tom Maidment, partner at Lucas Fox.

‘For several years the market has been dominated by international buyers and whilst foreign investors still account for the majority of our sales, the number of local buyers is clearly on the rise and we expect this trend to continue apace throughout 2016,’ he added.
Sales to the British were also up by 50% in Barcelona, and in Lucas Fox’s Ibiza office, UK buyers accounted for more than two thirds of home sales, primarily due to the strong Pound against the Euro during 2015.

The Barcelona office also saw a significant rise in Dutch and US buyers during 2015. The number of Russian buyers has dropped substantially, however, and are being replaced by buyers from the Middle East.
Sales to the Spanish were also particularly strong in Valencia where transactions to local buyers more than doubled. There were also significant increases in Maresme, the coastal area to the North of Barcelona, and the Costa Brava, where Spanish buyers accounted for 37% and 29% of home purchases respectively.

Lucas Fox co-founder Alexander Vaughan explained that while asking prices might well be rising sales prices are not. ‘Year on year we have not seen house prices rises. In fact the average property price for a Lucas Fox sale in 2015 was around €1 million, the same figure as in 2014,’ he said.

‘Sales prices can still be significantly lower than the asking price, although that gap is finally narrowing. The average price of prime property in prime regions is also being driven up by sales of new developments, which can sell for 20% to 30% more per square meter than re-sale homes in the same prime micro-area. Currently demand for this kind of product is outstripping supply,’ he added.