By Adrian Bishop
Values of new homes in Spain rose 5% in 2017, accelerating in the second half of the year, new figures show.
The average price of Spanish new build property is €2,227 per square metre, according to the Spanish Residential Real Estate Trends Report
for January 2018, from the Sociedad de Tasación (ST).
Price growth in the second half of the year (3.3%) was almost double the 1.7% in the first six months.
Barcelona is the top performer among Spanish cities, with an annual rise of 9.9% to an average €3,865 a square metre, which is close to 2005 levels, before the global housing market crash. Madrid, at €3,167 per square metre, means its average property prices are at 2004 levels.
Cáceres at €1,138 per square metre and Badajoz on €1,155 a square metre have the cheapest new housing in Spain, on average.
The average house takes 7.6 years of salary to buy, just 0.4% up on a year ago.
The average price of new housing in the rest of the cities studied that are not provincial capitals is €1,580/sqm, a rise of 1.6% in 2017.
The average price of new housing in cities with a population of more than 100,000 that are not provincial capitals is up 2.2% to €1,712/sqm.
In cities with a population of more than 50,000, the average price of new housing was €1,583/sqm, which is an annual rise of 1.7%. Cities with a population over 25,000 saw a similar 1.8% rise to €1,495/sqm.
The average price of new housing in the cities with a population under 25,000 rose 0.9% to €1,483/sqm.
The level of production of new housing rose 15% in 2017, according to figures from the Ministry of Public Works. The report says, “Although it is still far below what is considered adequate to the needs of the population, the maintenance of the growing rate can be considered as a positive symptom in the recovery of the sector in comparison with the lower rates recorded five years ago.
“Madrid and Barcelona are still the engines of price recovery, keeping the rest of the municipalities at a certain distance. However, it is noteworthy that prices are not experiencing decreases in any of the analysed populations, although there are some, including some capital cities, that do not experience any positive or negative variation with respect to the previous year.”
The supply of homes held by financial institutions has been considerably reduced, although prices are still generally lower than those offered by other professionals in the sector.
In the towns with the highest level of increases, there are rising numbers of investment properties bought by national or foreign investors, in many cases for rental purposes.
ST forecasts that the Spanish new home sector will continue its recovery begun just over two years ago, although there is still a long route ahead “to reach the desirable cruising speed.”
The ST Confidence Index remained unchanged during the last quarter of the year at 56.8 points. Catalonia is the only autonomous community in which the ST Confidence Index fell considerably, from 58.1 to 56.2 points in the fourth quarter of 2017, after 10 consecutive increases.