INE: House Prices Rose By 6.3% In Q1 2016
10 June 2016 – Expansión
The recovery of the real estate market is picking up strength, so much so that both house prices and the volume of transactions are growing at their highest rates since the burst of the real estate bubble. Specifically, house prices rose by 6.3% during the first quarter of the year, compared with the same period last year; meanwhile, the number of acquisitions increased by 29% in April. All of those figures come from data published by INE yesterday.
House prices, which first started to rise again two years ago, increased significantly during the first quarter of the year. In this way, whilst prices increased by 4.2% during Q4 2015, that rate of growth accelerated by another 2.1 percentage points in the subsequent three months. As such, they have reached their highest rate of growth since Q3 2007, when the real estate market had just started to slow down, but the bubble had not yet burst.
With these figures, it seems that the real estate market has now entered a new phase in its recovery. Although the volume of transactions began to recover a few years ago, prices continued to hit new lows; now, however, it seems like prices are starting to recover too, and with increasing strength, in line with the increase in operation volumes.
Madrid led the price rises during Q1 2016, with an increase of 9.7%, followed by the Balearic Islands (8.8%) and Cataluña (8.6%). That is because those regions include areas with high demand from foreigners and also because, that is where the stock of unsold homes has been more limited. Amongst these regions, the increase in Madrid was particularly strong, given that prices rose by 2.9% with respect to the previous quarter, double the average rate of growth across the country (1.5%) and the highest growth rate seen in any of the autonomous regions.
Conversely, the increase was much more moderate in Castilla-La Mancha, where prices rose by 1.5% with respect to the previous year. Castilla y León and Extremadura (1.7% in both cases) recorded similar increases. Nevertheless, these statistics do not take the shine off of the real estate recovery, given that prices rose at a higher rate than last quarter in every autonomous region. (…).
Finally, the price of second-hand homes rose by 6.4% with respect to 2015 and so outperformed new home prices by 0.3 percentage points (6.1%).
This increase in prices is fuelling the increase in demand, given that the volume of house purchases grew at a rate of 29%, the maximum rate since records of these statistics began back in 2007. Moreover, INE published this data on the same day that the Ministry of Development confirmed that the volume of acquisitions had increased by 20.7% during Q1 2016, with respect to the same period in 2015. Although the methodologies are different, it seems that growth had already become strong during the first three months of the year, before shooting up in April.
The volume of second-hand homes sold rose by 32.3%, whilst the number of new homes sold increased by 17.6%. By region, the highest increase was recorded in the Balearic Islands (61.7%), whilst the lowest rise was seen in the Canary Islands (2%).
Original story: Expansión (by Pablo Cerezal)
Translation: Carmel Drake