Cost of renting and buying up across Spain
The average price of second-hand housing in Spain in the month of August 2022 was 1,951 euros per square meter. This represents a rise of 0.95% when compared to July. When we compare the figure to the same month last year, the change is +5.26%, up from 1,853 euros.
“The residential market has experienced an incredible boom throughout 2022, but from now on the figures for sales and mortgages will not be so bulky,” said Ferran Font, director of studies at pisos.com. “It is very possible that the July rate hike carried out by the European Central Bank will be followed by another in September, so loans for home purchase will not be as accessible. The increase in the cost of financing will cause a certain withdrawal in demand, and therefore, the stabilization of prices, which although they have not risen uncontrollably, have shown great dynamism, to the point of placing many capitals at price levels prior to the crisis of 2008“.
Font also points out that with inflation reaching double-digit figures for two months in a row, recession is a more than real threat to the Spanish economy, especially if other variables such as GDP or unemployment are taken into account. Given this possibility, Font predicts that real estate transactions will slow and purchase decisions will suffer as a result, and this will end up affecting prices”.
Balearic Islands Most Expensive Community
According to the monthly data, the most expensive regions in August 2022 were the Balearic Islands (€3,550p/m²), Madrid (€3,260p/m²) and the Basque Country (€2,955p/m²), and the cheapest Extremadura (€805p/m²), Castilla-La Mancha (€848p/m²) and Murcia (€1,122p/m²). Year-on-year, the most significant increases were seen in the Balearic Islands (10.12%), the Valencian Community (9.31%) and Murcia (8.53%), registering the only negative adjustment in Castilla-La Mancha (-0.08%).
Regarding the provinces, the largest increases from one year to another were located in Alicante (13.18%), the Balearic Islands (10.12%) and Malaga (9.86%). The most pronounced decreases were recorded by Ciudad Real (-6.48%), Teruel (-4.57%) and Palencia (-3.49%).
In the classification of the provinces by price, the most expensive in August 2022 was the Balearic Islands, with 3,550 euros per square meter. It was followed by Guipúzcoa (€3,283p/m²) and Madrid (€3,260p/m²). On the opposite side was Ciudad Real, which closed the classification with 620 euros per square meter. Other economic provinces were Jaén (€689p/m²) and Cuenca (€747p/m²).
As for the provincial capitals, the most intense increases in the cost of Spanish homes for sale compared to August 2021 occurred in Alicante (18.05%), Murcia (16.59%) and Almería (11.85%). The ones that fell the most were Huesca (-10.79%), Palencia (-7.66%) and Lleida (-3.30%). Ordering the provincial capitals by price, Donostia-San Sebastián was the most expensive, with 5,753 euros per square meter. It was followed by Barcelona (€4,473p/m²) and Madrid (€4,307p/m²). The capital of Jaén was the most affordable with 1,053 euros per square meter. Other cheap provincial capitals were Lleida (€1,125p/m²) and Ciudad Real (€1,130p/m²).
Rental Costs
The price of rental housing fell -3.4% in its monthly variation and rose 3.9% in its interannual variation, placing its price at €10.83p/m² per month in August, according to data from Fotocasa. This year-on-year increase (3.9%) represents the sixth increase in 2022.
“Although the increase in August has moderated on a year-on-year basis, it could be due to a seasonality issue, in which the summer season ends and coincides with a drop in demand, before the start of the September academic year. However, if we zoom in on the autonomous communities, provinces and municipalities, we detect that almost without exception there are significant increases in rental prices. It is perceived that in the areas of greatest demand and therefore most stressed, the increases exceed two digits. Which is an indicator that the price continues to rise, pushed by a situation of imbalance between supply and demand, in which the housing stock has been reduced in a very detrimental way in recent months,” said María Matos, director of Studies at Fotocasa.
Rental Costs by Autonomous Community
If we look at the rental prices compared to those of a year ago, we see that all the communities increased the year-on-year price in August. Five communities exceeded two digits and specifically in the Balearic Islands, Valencian Community and Cantabria it exceeded 15% year-on-year. The order of the areas of Spain with interannual increases is: Balearic Islands (17.8%), Valencian Community (16.0%), Cantabria (15.4%), the Canary Islands (12.6%), Madrid (11.6 %), Castilla y León (9.2%), Galicia (8.3%), Region of Murcia (8.3%), La Rioja (6.5%), Catalonia (5.5%), Navarra ( 5.3%), Asturias (5.2%), Castile-La Mancha (4.0%), Extremadura (3.8%), Andalusia (3.4%), Aragon (3.4%) and Country Basque (1.7%).
In August 2022, six communities exceeded the historical maximum rental housing prices per square meter per month. The areas of Spain with the highest prices in the entire historical series are the Balearic Islands (€13.93p/m² per month), the Canary Islands (€10.87p/m² per month), Galicia (€7.95p/m² per month), Navarra (€10.40p/m² per month), Asturias (€8.68p/m² per month), and the Basque Country (€13.64p/m² per month).
Regarding the ranking of Autonomous Communities with the most expensive homes for rent in Spain, Madrid and Catalonia are in the first places, with prices of €15.44p/m² per month and €14.91p/m² per month, respectively. They are followed by five more communities with prices above €10.00p/m² per month and they are: the Balearic Islands with €13.93p/m² per month, Basque Country with €13.64p/m² per month, Cantabria with 10.97 €p/m² per month, the Canary Islands with €10.87p/m² per month and Navarra with €10.40p/m² per month.
Renting by Province
Almost all provinces increased the year-on-year price of rental housing in August 2022, except for Guadalajara and Cáceres. Increases of more than 10% occur in 11 provinces and in only three provinces the increase is less than 1%.
The order of the provinces with interannual increases of more than 10% are: Girona (19.3%), Alicante (19.2%), Málaga (18.2%), the Balearic Islands (17.8%), Cantabria (15.4%), Valencia (14.4%), Las Palmas (13.4%), Lleida (12.0%), Madrid (11.6%), Tarragona (10.6%) and Santa Cruz de Tenerife (10.4%).
As for prices, 13 provinces exceed 10.00 euros per square meter per month for the cost of rental housing. The three most expensive provinces are Barcelona with €15.96p/m² per month, followed by Gipuzkoa with €15.62p/m² per month and Madrid with €15.44p/m² per month.
