At the end of Q3 rental costs are down 0.2%
The average price of second-hand housing in Spain in the month of September 2022 was 1,962 euros per square meter. This figure represented a rise of 1.84% compared to June 2022. Year-on-year, the rise reached 6.02%. The rebound compared to August 2022 was 0.57%, since the average price last month was 1,951 euros per square meter.
“Second-hand housing has prolonged its upward behaviour in the third quarter of the year, but it is to be expected that with the recent increases in interest rates that the European Central Bank has put on the table, the final stretch of the year will bring a slight deceleration“, said Ferran Font, Director of Studies at piso.com. He also suggested that residential property has moved in contained rise margins if we take inflation as a reference, supported by a very active demand in search of opportunities. Font also added “the possible arrival of an economic recession will limit the thrust of a market that, faced with more expensive mortgages and more savings-focused buyers, will slow down.”
However, Font insists that this slowdown will not be distributed evenly throughout the Spanish territory. “We have witnessed how certain capitals have placed their prices at pre-bubble levels, while others are still a significant distance away,” explains Font. The imbalances in population density between areas will also be appreciable when the price curve is inverted: “The most powerful cities will hardly change, while others will have a downward path”, declared Font.
Prices by Autonomous Community
In the third quarter of the year, the Balearic Islands (4.30%), Madrid (2.70%) and Andalusia (2.31%) led the price increases. The only drop occurred in Extremadura (-1.71%). Year-on-year, the Balearic Islands (12.07%), the Valencian Community (9.48%) and Madrid (8.97%) showed the most significant increases. There were no setbacks in this period. The most expensive region in September 2022 was the Balearic Islands (€3,605p/m²) and the cheapest was Extremadura (€802p/m²).
Prices by Province
The largest quarterly increases took place in Zamora (5.84%), Soria (4.61%) and the Balearic Islands (4.30%), while the most marked setbacks took place in Badajoz (-1.99%), Cáceres (-1.25%) and Toledo (-1.23%). From one year to the next, those that rebounded the most were Alicante (13.10%), the Balearic Islands (12.07%) and Malaga (11.17%). In the falls section, the first positions were for Ciudad Real (-8.50%), Teruel (-4.12%) and Palencia (-3.56%). The most expensive province was the Balearic Islands (€3,605p/mm²) and the cheapest was Ciudad Real (€625p/mm²).
Quarterly Rental Costs
Rental housing in Spain had an average price of 10.20 euros per square meter in September 2022. This figure marked a monthly rise of 0.10% and a year-on-year rise of 3.98%. Year-on-year, the price fell -0.20%.
“Although renting a home today is more expensive in practically all the provincial capitals, we are seeing how the national average monthly payment is containing its thrust in the monthly variable, with no rises above 1% for a year. In fact, from January to September it even registered two drops in this interval“, said Font. However, Font also indicates that this containment should not lead us astray: “Tenants have less spending capacity due to inflation, so any increase, no matter how small, destabilizes the budget available to households“, he said.
On the supply side, there are a whole series of opposing forces that make it difficult to predict market behaviour with an acceptable margin of safety. Font indicates that “the income control measures, although they have not yet materialized through the new Housing Law, act as a deterrent to investment in rental housing. However, on the other hand, housing continues to be an asset to direct savings while other investments are more volatile in a possible recession scenario.” In any case, Font insists that “in the face of growing demand, the lack of supply is a bottleneck that has a very negative effect on access to housing“.
Rental Costs in Autonomous Communities
The quarterly data revealed that the most expensive regions to rent property in Spain in September 2022 were Madrid (€13.53 p/m²), the Balearic Islands (€12.92 p/m²) and Catalonia (€11.86 p/m²), while the cheapest rents were in Castilla and León (€4.70 p/m²), Extremadura (€5.27 p/m²) and Castilla-La Mancha (€5.47 p/m²).
In the third quarter of the year, the most striking increase took place in Cantabria (7.11%). The greatest negative adjustment occurred in Asturias (-5.76%). Compared to last year, the Balearic Islands (13.50%) was the one that increased the most and Navarra (-9.11%) the one that fell the most.
In the classification of provinces by price, in September 2022 the most expensive was Madrid, with 13.53 euros per square meter. It was followed by Barcelona (€13.18 p/m²) and the Balearic Islands (€12.92 p/m²). On the opposite side, Cuenca closed the classification with 3.18 euros per square meter. Other economic provinces were Ávila (€3.35 p/m²) and Ciudad Real (€3.59 p/m²). The province that recorded the most significant increase in the third quarter was Cantabria (7.11%), while the one that recorded the most significant fall was Salamanca (-6.33%). From one year to another, the highest increase registered was that of Valencia (17.83%). The prices most significantly reduced were in Guipúzcoa (-11.85%).
Regarding provincial capitals, Barcelona was the most expensive for tenants with a price per square meter of 18.88 euros. It was followed by Madrid (€17.29 p/m²) and Donostia-San Sebastián (€16.68 p/m²). On the contrary, Zamora was the cheapest with 6.01 euros per square meter. Other economic provincial capitals were Ourense (€6.06 p/m²) and Ciudad Real (€6.27 p/m²). Alicante (8.05%) led the quarterly increases, while Pontevedra (-7.55%) was the capital that devalued the most in this period. Compared to September 2021, Alicante (18.71%) led the increases. The most striking cut was thrown by Lleida (-1.32%).
