The price of housing in Spain increased by 2.3% during the third quarter of 2017. This leads to the average for a square metre rising to 1,590 euros, according to the latest price index from idealista. The annual variation is +3.7%.
Fernando Encinar, head of idealist studies, says “The real estate market, both for sale and for rent, is in keeping with expectations. The fall in the unemployment rate and the economic improvement are directly related to the rise in prices within the sector. Optimism has returned to the market and prices are rising all over the country. However, as we have been warning for more than a year, normalization is occurring at two speeds, and while there are already municipalities like Palma that see higher prices, in other locations they are still falling.”
“The forecast for the coming months is a continuation of current trends. 2017 will close with more sales than in the previous year and an increase in the number of new mortgages. It is also expected that new building visas will increase because there are large areas and urban areas with very limited or non-existent stock.”
Despite the continuing price increase, Encinar does not expect to see a bubble saying: “We are still far from the levels reached in 2007 and financial institutions are now more cautious in facilitating credit.”
All communities saw prices rise in Q3, although the differing rates of increase are remarkable. The largest increase was in the Balearic Islands where prices increased by 7.6%. It is also worth mentioning that on the annual variation, prices on the Balearic Islands are up 23.2%. Catalonia was next with an increase of 3.4%, with Madrid (+2.7%) and Murcia (+2.4%) coming next. Prices in Andalucia increased by 1.5% compared to the previous quarter and by 4.1% when compared to 2016.
The smallest increase was in Galicia and Asturias at only 0.1%, a mile away from the increases in the islands.
The most expensive community remains as Euskadi with an average cost per square metre of 2,030 euros. The cheapest community was Castilla La Mancha with an average price of 934 euros/m².
Prices increased in 42 provinces during the third quarter with the Balearic Islands topping the table as prices increased 7.6%. Lleida was next with prices going up by 5.4%, followed by Barcelona (4.4%) and Castellón (3.5%). In Málaga, prices increased by 2.6% compared to the previous quarter and by 8.3% when compared to the previous year.
However, prices fell in Zamora (-1.2%), Ourense (-0.8%), Seville and Salamanca (-0.7% in both cases).
The ranking of provinces by price sees the Basque provinces of Guipúzcoa and Vizcaya at the top of the table, with average prices of 2,754 euros/m² and 2,580 euros/m², respectively. Toledo is the most economical province (832 euros/m2²), with Ávila (836 euros/m²) and Ciudad Real (875 euros/m²) following.
The highest increase amongst Spain’s provincial capitals was in Palma de Mallorca where prices increased 7.3% during Q3. Notably, this makes Palma the first capital to reach and exceed the price levels of 2007. Lleida saw prices increase by 5.3%, with Malaga close behind with prices going up 5.2%. Girona (4.9%) and Pamplona (3.9%) also saw significant increases.
In contrast, Zamora saw the largest fall in prices with owners lowering their expectations by 2.3%. Next was Teruel (-2%), and Soria and Cuenca (-1.8% in both cases).