5 November 2015 – El Economista
According to Tinsa, house prices increased by 0.7% during the third quarter of the year with respect to the same period last year in the Community of Madrid, having increased by 1.5% between January and September. Meanwhile, prices in the city (of Madrid) rose by 0.2% during the same period.
According to Tinsa Research’s general index, it takes an average of 7.7 months to sell a home in the Community of Madrid.
The city of Madrid, where average house prices amount to €2,044/m2, is the “most liquid” regional capital of the five large cities analysed, with an average sales period of 6.1 months.
It is followed by Barcelona, where it takes an average of 6.5 months to sell a home.
In terms of the number of building permits granted, the city of Madrid experienced a slight decrease during the first quarter of 2.6% (1,130 permits) with respect to the same period a year earlier.
By contrast, the level of activity in the second-hand home market increased by 18.7% YoY in the second quarter, to 7,678 operations.
According to the data published by Tinsa, in October, the average price of new and second-hand homes in Spain recorded its first YoY increase for more than seven and a half years, with a rise of 0.8% with respect to the same period in the previous year.
From the peaks recorded before the burst of the real estate bubble, average house prices in Spain have experienced a cumulative decrease of 41%.
During October, the Mediterranean Coast, and the Balearic and Canary Islands were the main drivers of house price growth, registering increases of between 3.6% and 4.2% YoY, respectively.
The group comprising the Balearic and Canary Islands recorded the best YoY increase of any region in October, with a rise of 4.2%, followed by the Mediterranean Coast, with an increase of 3.2%.
The regional capitals and major cities experienced an increase of 0.6% and only the metropolitan areas and small towns recorded slight YoY decreases of -0.6% and -0.2%, respectively.
Since the start of the year, average house prices in Spain have increased by 0.4%, and prices have risen by the most in the Mediterranean Coast, and in regional capitals and major cities.
From the peak prices of 2007, prices have fallen by the most in the Mediterranean Coast, with a cumulative decline of 46.7%.
Metropolitan areas, and regional capitals and major cities, have recorded a similar cumulative decrease since 2007, of 44.4% and 44.5%, respectively.
Average house prices in Spain recorded their first YoY decrease in March 2008 and have continued on a downward trend since then.
The rate of decrease began to slow in the second quarter of 2013 and the General Index has remained stable over the last year.
Although the YoY data recorded in October represents a turning point, Tinsa believes that the stabilisation of prices still needs to be consolidated.
Thus, the evolution of average house prices over the coming months will depend on the behaviour of the economy and the labour market, where a considerable amount of uncertainty still exists.
Original story: El Economista
Translation: Carmel Drake