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Resale House Prices Fell Slightly During 2016

During 2016 resale house prices normalised, even recording a slight annual decline. Prices fell by 0.7% during the year to stand at an average of 1,533 euros p/m², despite a slight increase during the last quarter.

Fernando Encinar, head of idealista research, said “2016 has been a turning point after the real-estate bubble burst in 2007. Although the year closed with a moderate negative variation, the last quarter showed the trend that had accumulated during the last 12 months seems to have reversed.”

In most of the country’s capitals the crisis has been left behind. In Barcelona, prices have recovered 30% since their lows of 2013. In Palma de Mallorca, although prices have increased by more than 10%, the recovery from the lows is only 14%. In other capitals like Madrid, Valencia, Sevilla, Alicante or San Sebastián the growth is not so strong but the recovery is clear.

Although there are not yet any official sales figures for the year, it is expected that the year will close above 400,000 closed deals, supported mainly by good sales figures in Barcelona, Madrid, Malaga, Valencia and Alicante. This increase in sales has undoubtedly contributed to the reactivation of the mortgage market which has had a year-on-year growth of around 20%.

Autonomous Communities

Six communities saw prices increase in 2016. The highest increase was in the Canary Islands, where owners are now asking 7.8% more than a year ago. There were also increases in the Balearic Islands (5.3%), Catalonia (3%), Valencia (2.5%) and Madrid (1.1%). On the opposite end of the scale there were declines in La Rioja (-5%), Aragon (-4.9%) and Castilla La Mancha (-3.5%). In Andalucia prices increased by 1.5% when compared to the previous year. During the fourth quarter the increase was 0.9%.

Euskadi remains the most expensive community with an average price per square metre of 2,506 euros. This is followed by the Community of Madrid (2,375 euros p/m²), the Balearic Islands (1,973 euros p/m²), and Catalunya (1,901 euros p/m²). The cheapest is Castilla la Mancha with an average per square metre of 919 euros. This is followed by Extremadura (939 euros p/m²), and Murcia (1,044 euros p/m²).

Provinces

17 provinces have seen price increases over the year. Of these, the greatest increases were in the Canary Islands. Prices increased 8.1% in Santa Cruz de Tenerife, and by 7.5% in Las Palmas. They were followed by increases in Tarragona (7.3%), Girona (5.9%), Lleida (5.5%) and the Balearic Islands (5.3%). Ciudad Real and Ourense both saw prices fall by 6.7%.

The Basque provinces of Guipúzcoa and Vizcaya have the most expensive house prices with an average price per square metre of 2,816 euros, and 2,566 euros, respectively. Following are Madrid (2,375 euros p/m²) and Barcelona (2,220 euros p/m²).

Toledo is the most economical province with a price of 810 euros p/m², followed by Cuenca (857 euros p/m²) and Ávila (859 euros p/m²).

In the province of Malaga house prices increased annually by 2.5%, despite falling by 0.5% during the fourth quarter.