10 October 2016 – Expansión
House prices are rising at a strong pace, residential sales are recovering and mortgages are coming back, timidly, along with cranes. The residential market has left its worst years behind it and is setting itself up for a robust recovery, without any signs of the excesses that created the real estate bubble.
Statistics published on Friday confirm that the wind is blowing in the right direction for the real estate sector. The average value of free (unsubsidised) homes grew by 2.4% YoY in September, according to Spain’s largest property appraiser, Tinsa. The cumulative increase in prices during the first nine months of the year amounts to 2.9%.
At the same time, sales of unsubsidised homes also rose in August by 19.9% YoY, driven by the strong performance of the second hand segment, which accounted for 82.8% of the market, according to INE. The number of operations involving new homes rose by 3.3%, whilst the number of second-hand home sales rose by 24.6%.
In August, 35,501 residential properties were sold, up by 7.3% compared to July. The cumulative increase during the first eight months of the year amounted to 14.8%.
Nevertheless, the experts warn that “the monthly variation, albeit positive, is not sufficiently high following the decrease registered in the previous month”, said Manuel Gandarias, Director of Research at Pisos.com. Why? Because in the house sales figures registered in August included operations outstanding from July, due to a Supreme Court ruling regarding late payment interest, which means that the increase should have been greater. “In September, we will also see quite a bulky increase”, added Gandarias.
“The crisis has left a two-speed real estate market and the behaviour of prices and sales will continue to be very uneven”, warned Beatriz Toribio, Head of Research at Fotocasa. The autonomous regions that have seen the highest increases in house sales are the Balearic Islands (49.2%), Cataluña (+41%) and Navarra (+38.1%) Meanwhile, Murcia (-5.2%), Galicia (+4%) and the Community of Madrid (+10.4%) recorded the lowest increases. “The worst is behind us in Cataluña, Madrid, the Balearic Islands, the Canary Islands and most of the Mediterranean Coast, but the outlook is not nearly as encouraging in the rest of the country”, said Toribio.
According to Tinsa, prices are growing by more in the Balearic and Canary Islands (+4.4%) than in the rest of Spain, although they are followed very closely by the Mediterranean Coast (+4.3%). In the major cities, prices rose by 2.5% in September. “The worst is behind us, but the recovery will be slow”, summarised Toribio.
Original story: Expansión (by Juanma Lamet)
Translation: Carmel Drake