Fotocasa: House Price Rises Led By Madrid & Barcelona

18 January 2016 – Expansión

(…). The two-speed housing sector in Spain is becoming ever more marked: whilst house sales and prices are increasing significantly in Barcelona and Madrid, as well as in certain areas along the coast, the provinces where demand is lowest are continuing their slow trend towards stabilisation.

But the residential sector is so fragmented that even within the two major cities, there are sub-markets where house sales and prices are growing by more than in others. House prices are now increasing in nine out of the 10 districts in Barcelona and in 13 out of the 21 districts in Madrid, according to Housing in 2015, a report compiled by the real estate portal Fotocasa.es, which will be published on Wednesday and to which Expansión has had access.

“The changing trend in terms of second-hand house prices is clear in the city of Madrid”, says the report. The average price of homes for sale rose by 2.2% in the capital, after having fallen by 4.9% in 2014. It is worth remembering that actual sales prices, the amount that is reflected in the deeds, have increased by even more, given that buyers now have less margin to obtain discounts than they used to, when prices were generally on the decrease.

Whilst in 2014, house prices decreased in every district in the capital, last year they recorded increases of up to 13.7% in the Centre, followed by Salamanca (9.3%), Chamberí (8.6%), Tetuán (7.6%), Fuencarral (6.7%) and Arganzuela (6.4%). This results in the report’s first conclusion: well-established, well-located areas, where there is more demand, in other words, prime areas, are recovering more quickly than the rest. In general, such areas include central, well-connected areas, with significant volumes of commercial activity, which are fashionable for certain profiles of buyer.

Barcelona is leading the way

The same trend is happening in Barcelona, where last year, the most notable price rises were seen in the districts of Gracia (with an increase of 10%), Ciutat Vella (8.5%), Eixample (8.4%), Sant-Montjuïc (8.2%), Horta-Guinardó (6.9%) y Sarrià-Sant Gervasi (6.8%).

According to Beatriz Toribio, Head of Research at Fotocasa.es, “prices are going to continue increasing in the prime areas of the two regional capitals in 2016, but we do not expect to see two-digit increases. (…).

In terms of second-hand homes, average prices in Madrid capital amount to €2,695/m2, whilst in Barcelona the equivalent amounts to €3,179. In other words, it is 22% cheaper to buy a home in the Spanish capital than in the Catalan capital. Or, to put it another way, homes are 28% more expensive in Barcelona than in Madrid.

There are two reasons for this. On the one hand, the Catalan capital has a higher population density than Madrid, which affects supply and demand, given that the concentration is greater; moreover, barely any construction takes place there. The second reason is that prices are recovering more sharply in Barcelona.

The most expensive districts in the country are Sarrià-Sant Gervasi (where homes go for €4,575/m2, on average), thanks mainly to significant interest from overseas investors and Salamanca in Madrid (€4,274/m2). (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

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