19 April 2017 – Expansión
The latest statistics confirm the continuation of the good vibe in the housing market, which is advancing at cruising speed thanks to the boost from large cities. Last week, the appraisal company Tinsa reported that the average appraisal value of residential properties experienced a YoY increase of 2.7% in March.
The YoY price rise amounted to 5.5% in large cities, which account for 40.8% of the market, according to the weighting that Tinsa applies to calculate the statistics. Major cities saw their positive evolutions accelerate in March. Although the average price in January was 1.5% higher than at the end of 2016, the increase during the first three months of the year amounted to 3.5%, thanks to the fact that the rise in March was 2.2 points higher than in February.
Once again, the most marked price increases were recorded in the Balearic and Canary Islands: up by 7% on average. In both cases, the increase in demand for holiday homes and in purchases made by overseas investors, are spurring on the recovery in the real estate sector.
Something similar is happening on the Mediterranean Coast, which saw prices rise by 1.9% YoY, despite the huge surplus of new unsold properties in certain provinces in the region, above all in Castellón.
The cities and the coast are the two segments where the housing market has performed the best traditionally, due to the high level of demand. In the case of provincial capitals, due to the creation of new households and, above all, the marked increase in purchases made by investors. Those two variables, combined with the strong rise in the rental market, mean that Madrid and Barcelona are continuing in their role as the real engines of the housing market.
In aggregate terms, the residential market is following the positive trend with which it started the year. The growth of 2.7% is almost one point above the figure recorded in February (1.8%). These increases are in line with Tinsa’s forecasts for 2017. The Head of Research at the appraisal company, Jorge Ripoll, revealed his predictions: growth will be almost flat this year, “ranging between 0.1% and 2%”. This is a moderate estimate, compared to those published by other analysts. Overall, the consensus amounts to around 5%.
The other two real estate sub-markets analysed by Tinsa experienced a YoY decrease in prices in March. The metropolitan areas and “other municipalities” saw reductions of -0.5% and -0.6%, respectively, over the last 12 months.
“During the first quarter alone (January, February and March), average prices in Spain rose by 3.2%”, according to Tinsa’s report. “The cumulative decrease since the peaks of 2007 now stands at 39.4%”. In other words, it has fallen below 40% for the first time since June 2014.
The largest decrease in prices since the peaks of 2007 was recorded on the Mediterranean Coast (down by 45.5%), followed by metropolitan areas (-44%) and then the provincial capitals and large cities (-42.1%). In the Balearic and Canary Islands, where historically, prices have decreased by the least, the cumulative reduction amounts to 24.2%.
Original story: Expansión (by Juanma Lamet)
Translation: Carmel Drake