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INE: House Prices Rose By 4% In Q3

9 December 2016 – Expansión

Madrid led the house price rises, with an increase of 7.8%; Cataluña recorded an increase of 6.6%. Price in the Balearic Islands rose by 5.4%.

House prices accelerated slightly during the third quarter of the year, but the differences between the two speeds in the market widened. In fact, only Madrid, Cataluña and the Balearic Islands saw higher than average price rises; house prices in the other fourteen autonomous regions grew by below average.

Specifically, house prices rose by 4% during the third quarter of the year, with respect to the same period last year, according to data published on Wednesday by Spain’s National Institute of Statistics (INE), based on signed house deed figures provided by the General Council of Notaries. As such, the indicator recorded ten consecutive quarters of increases, a trend that will be maintained over the next few months, according to experts.

INE’s data also showed a slight acceleration in prices, with the average rate increasing by one tenth of a percentage point, from 3.9% in Q2 to 4% in Q3. This figure is lower than that recorded during the first quarter of the year (6.3%) and slightly below that recorded during the last two quarters of 2015.

In the context of the overall recovery in the real estate market – which began in the second quarter of 2014 after six years of decreases – new house prices are rising at a rate of 7.3%, more than double the rate of second-hand home price increases (3.5%). That is because the supply of new homes in certain areas is now scarce, which is driving prices up. (…).

By autonomous region

Moreover, the data also showed that the recovery in the housing sector is happening at two speeds, driven primarily by the large urban centres and tourist housing segments. By autonomous region, Madrid led the price increases, with a rise of 7.8%, the same figure as last quarter. In second place, Cataluña accelerated its growth rate by 1.1 points, to reach 6.6%, whilst the Balearic Islands was ranked in third place, with an increase of 5.4%, four tenths higher than in Q2.

These three autonomous regions are the only ones that saw house price rises above the national average and they have one thing in common: they are all keeping their foot on the accelerator and some are even increasing the pressure. As such, the gap is widening between the recovery in the housing sector in the most sought-after areas and in other zones where stock is more abundant and demographic pressure is lower.

At the other extreme, we have Asturias, where house prices remained stable during Q3; Cantabria and Murcia, where prices rose by 0.7% in both cases; and Castilla y León (1.2%).

In summary, we are seeing quite generalised growth, in the sense that prices are rising in 16 regions and twelve of them have accelerated their rates with respect to the previous quarter. (…).

Forecasts

This data shows that house prices are continuing on their upwards trajectory but there is still “a long way to go”, said the Director of Research at Pisos.com, Manuel Gandarias.

In his opinion, the boost in the prices of homes under construction is a good sign, because it confirms the recovery phase. In 2017, we will see a recovery in house sales as well as “in new builds, after many years without any cranes on the horizon”. (…).

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake