According to the latest figures from pisos.com, average property prices of used housing in Spain increased in May by 1.08%, when compared to April. The average price now stands at 1,589 euros per square metre. In April the average price was 1,572 euros. With respect to May in the previous year, the increase is 3.05%, since the average price in May 2017 stood at 1,542 euros per square metre.
According to Ferran Font, director of studies at pisos.com, “property prices have stopped pressing on the accelerator, the exception being in the most popular areas where buyer and investor interest along with the slow development of new promotions are responsible for tightening the balance between supply and demand.” Font also notes that the evolution of the price of housing is “increasingly stable”, adding that we are “witnessing a moment in which the residential sector is moderating its peaks of growth and decline little by little.”
Furthermore, Font adds that “to maintain the expansive trajectory of the housing market within acceptable margins, it is essential that the existing gap between wages and sales prices is reduced”. Before we can return to 100% mortgages, Font insists that “we can not fall back into the same trap. You can not solve the problems of access to financing with complex offers in which the client signs anything to obtain approval.” Since the crisis, Spanish lenders have forced borrowers to borrow only what they can afford, analysing their solvency and borrowing limits. It would be unfair for lenders to return to the risk taking of the past.
The most expensive regions in Spain in May were the Basque Country (2,650€ p/m²), the Balearic Islands (2,572€ p/m²) and Madrid (2,125€ p/m²). The cheapest are Castilla-La Mancha (876€ p/m²), Extremadura (1,029€ p/m²) and Murcia (1,108€ p/m²). Down here in Andalucia the average price per square metre stands at 1,531€.
Year-on-year, the most striking increases occurred in the Balearic Islands (12.74%), the Canary Islands (12.46%) and Catalonia (11.80%). The most intense negative variations were in Aragon (-6.12%), Murcia (-4.90%) and Extremadura (-4.46%).
Looking at Spain’s provinces, the biggest increases were seen in the Balearic Islands (12.74%), Las Palmas (12.31%) and Barcelona (11.08%). The most pronounced decreases came from Palencia (-6.28%), Albacete (-5.86%) and Badajoz (-5.78%).
Ranking the provinces by price, first position in May 2018 goes to Guipúzcoa, with 2,835€ p/m². They were followed by Vizcaya (2,700€ p/m²) and the Balearic Islands (2,572€ p/m²). On the opposite side was Cuenca, which closed the month with an average price of 653€ p/m². Other cheaper provinces include Toledo (779€ p/m²) and Ciudad Real (779€ p/m²).
As for provincial capitals, the most intense increases in property prices compared to May 2017 occurred in Alicante (12.43%), Palma de Mallorca (12.31%) and Madrid (12.27%). The ones that fell the most were Huesca (-6.20%), Guadalajara (-5.22%) and Murcia (-4.69%). Ordering provincial capitals by price, Barcelona was the most expensive provincial capital, with an astonishing 4,140€ p/m². They were followed by Donostia-San Sebastián (3,840€ p/m²) and Madrid (3,265€ p/m²). The capital of Ávila was the most affordable with an average cost of 984€ p/m². Other cheaper provincial capitals were Cuenca (1,040€ p/m²) and Huesca (1,065€ p/m²).