IPE: Urban Land Prices Will Rise By 10% In 2015

17 June 2015 – Expansión

Land will be the next market to be affected by the change in the economic cycle. That is the main conclusion drawn by the first Land Pulsometer, prepared by the Institute of Business Practices (IPE). The average price of urban land will grow in 2015 “by almost two-digit figures”, according to the study coordinator, José Antonio Pérez, Director of Real Estate at IPE.

In this way, if in 2014, each square metre cost €147 on average, by the end of 2015, it will be worth €160/m2, the highest figure since 2012. “It is a clear turning point” says Pérez, who says that “investment in land has a threefold economic impact, due to its direct, indirect and induced effectcs”. That means, every euro spent on land leaves a final economic footprint of three euros.

This recovery will take place because prices will increase “at double that rate” on the coast and in the major cities, i.e. at around 20%, “especially on the Costa del Sol, in Levante, the Balearic Islands, the Canary Islands, Madrid, Bilbao, Barcelona and A Coruña”, says Pérez.

These forecasts come a day after the Ministry of Development published its official statistics, which confirmed the beginnings of an upwards trend – from very low figures – in the market for land. During the first quarter, the average price of urban land (per square metre) increased by 5.9%, and in cities (with more than 50,000 inhabitants), the increase was 37.8%. (…)

According to the report, the number of transactions involving buildable plots of land will increase by 5.04% in 2015. Andalucía will account for 22% of operations, followed by Cataluña (16%) and Castilla-La Mancha (11%). (…)

Andalucía and Madrid will generate the most value: €579 million and €508 million, respectively, which means that the two regions alone will account for 42% of the national activity, which will amount to €2,593 million, i.e. 0.25% of GDP. The total impact (direct, indirect and induced) of the market for land will be €7,780 million.

The average price of land in Madrid, the highest in Spain, will exceed €300/m2, followed by the País Vasco and Balearic Islands, where it will exceed €250/m2. (…)

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake