TINSA: New and used housing increases by 8.2% in the last 12 months

  • The average price in Spain maintains the momentum of previous months and increases by 2.4% from the previous quarter, placing growth in the last year at 8.2%.
  • The Community of Madrid (+12.1%), Aragon (+10.4%) and the Autonomous Community of Navarre (+9.2%) are the regions that increased the most in annual rate.
  • The bulk of the provinces show year-on-year increases between 3% and 7%, and the falls are limited to -1% in Zamora and Córdoba.
  • The capitals have revalued slightly below their provinces, softening the trend of past quarters. Las Palmas de Gran Canaria, Teruel, Córdoba, Vitoria and San Sebastián stand out from this behavior, with increases higher than the provincial average.
  • The theoretical purchase effort increased by three tenths in Spain compared to the previous quarter, up to 31%. In the Balearic Islands it reaches 53%, and, among the large capitals, Barcelona (46.6%) exceeds the average effort of Madrid (42.9%) and Malaga (40.6%).

Madrid, 30 June 2022 — The price of new and used housing in Spain maintained between April and June the momentum experienced during the previous two quarters, without increasing its intensity. The 1,685 €/m2 of average value reflected in the Tinsa IMIE Local Markets statistics for the second quarter represent an increase of 2.4% compared to the previous quarter and 8.2% in the last 12 months. The bulk of the provinces have registered year-on-year increases between 3% and 7%.

The average value of new and used housing in Spain is 21.8% below the peaks reached in 2007, after revaluing by 30.5% on average from its lowest level during the financial crisis (first quarter of 2015).

“We continue to observe an active demand that is combined with a limited supply and stresses prices upwards, despite the fact that the accumulated figures of sales show a slight slowdown compared to the same period of 2021,” says the director of the Tinsa Studies Service, Cristina Arias. The ECB’s policy of increasing rates to contain high inflation predicts, in Arias’ opinion, “an increase in the price of new mortgage credit, which, given the sensitivity of housing demand to variations in interest rates, may modify the purchase intentions of households.”

In addition, it is not ruled out that in the coming months there will be a tightening of the criteria for granting loans by financial institutions in the face of a scenario of economic slowdown and purchasing power eroded by inflation. “The progressive increase in interest rates may lead to a gradual moderation in the demand for housing that would slow down the increase in the prices of residential products,” says Cristina Arias.

The report incorporates as a novelty from this quarter statistical references of prices in 70 Spanish municipalities, which, without being provincial capitals, are considered relevant residential markets due to their population density and their volume of activity.

Autonomous Communities

For the third consecutive quarter, the 19 geographical entities (17 communities and two autonomous cities) registered price increases in year-on-year rate. The Community of Madrid (+12.1%), Aragon (+10.4%) and the Autonomous Community of Navarre (+9.2%) are the regions where the average price of new and used housing increased the most in the last 12 months. Eight other autonomous communities reflect intensities between 5% and 7.2%, led by Castilla y León. On the other hand, Melilla, Cantabria and the Canary Islands present the most contained evolutions compared to a year ago.

The quarterly variations reflect a continuation of growth, reaching 4.6 and 4% in Extremadura and Aragon and the rest standing at an intensity between 0.2% and 3.1%.

Regarding the post-financial crisis lows, the Community of Madrid (+55.1%) is the region where housing has revalued the most on average, followed by Catalonia (+41.8%) and the Balearic Islands (+34.3%). At the opposite end, Cantabria, Melilla, Region of Murcia, Galicia and Extremadura have increased their prices by less than 10% from the minimum values recorded in the previous cycle.

In 7 of the 19 autonomous communities and cities, the average price of new and used housing accumulates a fall of more than 30% from the peaks registered in 2007-2008. The regions where this gap is smallest are the Balearic Islands (-5.2% below the maximum values recorded in the historical series), followed by Madrid, -14% less.

Provinces

The bulk of the provinces in year-on-year increases between 3 and 7%. The most intense annual growth, between 7% and 13.1%, has Soria, Madrid and Zaragoza at the head. The falls are limited to -1% in Zamora and Córdoba. The intensity of quarterly growth ranges from 1% to 2%.

The highest provincial unit values are found in Madrid (€2,811/m2), the Balearic Islands (€2,592/m2) and Guipúzcoa (€2,492/m2), followed by the province of Barcelona (€2,378/m2) and Vizcaya (€2,279/m2). At the opposite end, the lowest unit values are located in Ciudad Real (716 €/m2), Cuenca (762 €/m2) and Zamora (805 €/m2).

As a result of this evolution, housing shortens distances with respect to the maximums of the series, with values between -5.2% and -45.7%. It leads the Balearic Islands (-5.2%), followed by Madrid (-14%). At some distance is Barcelona (-26.5%). The gap with respect to maximums exceeds 40% in the provinces of Toledo, Guadalajara, Lleida, Tarragona, Almería, Castellón and Tarragona and Huelva.

Capital

The figures show an extended dynamism in all geographies with a total of 48 capitals with year-on-year price increases. Between 0.7% in Oviedo and 11.4% in Teruel, half of the capitals register variations between 3% and 7%, compared to 1% – 4% in the previous quarter. Madrid stands out with an 11.3% growth compared to a year ago, and also with significant annual increases Valencia (+8.5%) and Palma de Mallorca, which moderates its upward trend and occupies an eighth place with a year-on-year increase of 7.5%.

In general, the capitals have registered a slightly lower growth compared to the provinces, softening the trend of the past quarters. Las Palmas de Gran Canaria, Teruel, Córdoba, Vitoria and San Sebastián stand out from this behavior; with moderate year-on-year price increases above their provincial values.

Only four capitals recorded decreases of limited intensity in the second quarter, with the exception of Zamora. Thus, Palencia, Jaén, Ourense and Cuidad Real registered falls between -0.5% and -0.7% compared to the range between -0.2% and -1.6% of the previous quarter, also with punctual falls in the same cities. Zamora registers falls of greater intensity attributed to the volatility of a smaller market size and lower unit values, which mark higher variations.

The capitals closest to the price levels of the boom, in the first decade of the 2000s, are Palma de Mallorca, which is 4.2% below its maximum, according to Tinsa’s appraisals; Madrid (-13.5%), San Sebastián (-13.9%) Barcelona (-17.8%) and Santa Cruz de Tenerife (-17.9%). At the opposite end, 14 other capitals still drag a cumulative fall of more than 40% from their peaks, with Ciudad Real (-48.5%) and Lleida (-48.3%) in the lead.

If the evolution of the lows of the financial crisis is analyzed, the continued growth of prices means that the average value in Madrid has increased by almost 63% (despite which it is still 13.5% below its historical maximum). The second capital that has revalued the most is Barcelona (+52.9%), followed by Palma de Mallorca (+50.2%) and Malaga (+44.4%).

The most expensive capitals maintain relative positions quarter after quarter with few alterations and are San Sebastian (€3,885/m2), Barcelona (€3,564/m2) and Madrid (€3,492/m2), followed at some distance by Bilbao and Palma de Mallorca. The cheapest are located in Castilla y León and Castilla La Mancha and are Zamora (1,001 €/m2), Ciudad Real (1,022 €/m2), Soria (1,047 €/m2) and Ávila (1,048 €/m2).

Full access to the Local Markets Q2 2022 Report

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