4 April 2016 – El Mundo
The housing market is becoming increasingly stronger in terms of prices in Spain’s large cities, with Barcelona and Madrid leading the charge. That is according to Tinsa, which has published its IMIE Local Markets Index for Q1 2016. Between January and March, the value of homes (new and second-hand) in Barcelona and Madrid soared by 9.2% and 7.5%, respectively, in YoY terms.
These high percentages sit well above the average increase across the country, which amounted to 1.4%, with the market recording its second consecutive quarter of increases. Cataluña (8.2%) and Madrid (7%) “are still the drivers, thanks to the dynamism of their respective capital cities”, says Tinsa.
After Cataluña and Madrid, the highest price rises were recorded in the Balearic Islands (3.8%), Castilla La Mancha (3.5%) and the Canary Islands (2.4%). During the quarter, Asturias (+2.2%), La Rioja (+2.2%) and País Vasco (+0.4%) joined the group of autonomous regions with positive movements in their YoY prices. At the other end of the spectrum, the highest decreases were recorded in Aragón (-3.5%) and Galicia (-3.1%), but those decreases have moderated with respect to previous months.
In this sense, for the first time since the start of the crisis, more autonomous regions recorded increases during the first quarter than experienced decreases. (…).
House sales takes 10.5 months on average
Meanwhile, it takes 10.5 months, on average, to sell a home. According to data on the housing supply and the rate of sales in each region, the provinces where it takes the longest time to find a buyer are Cantabria (19 months), Ávila (17.1 months) and Álava (16.8 months). By contrast, the provinces where the housing market is most liquid include Las Palmas and Madrid, as well as the autonomous cities of Ceuta and Melilla, with average sales periods there of less than seven months.
Meanwhile, the percentage of salaries required to pay the first year of the mortgage amounts to 22%, and it takes six years salary on average to buy an average home in Spain.
A recovery that is here to stay
During the presentation of the index, Tinsa’s Director of Products and Diversification, Pedro Soria, said that 2015 was the year of revival for the housing market and 2016 marks the beginning of the sector’s normalisation following seven years of deep crisis.
“The recovery is here to stay, we are embarking on a new more rational and sustainable cycle, and the general decrease in house prices has come to a definitive end” said Soria, who also added that the political uncertainty does not seem to have cooled the recovery. Nevertheless, Tinsa warns that regional markets are operating at different speeds. (…).
More sales, mortgages and construction permits
Tinsa’s Director of Research Services, Jorge Ripoll, predicts that interest rates will remain low in the context of low and negative consumer prices. According to Tinsa’s forecasts, house sales will grow by between 10% and 15% to reach between 440,000 and 460,000 this year, and housing permits will recover by between 30% and 40%, to amount to between 65,000 and 70,000.
In addition, mortgages will grow by between 15% and 20%. (…).
Evolution of prices by province
By province, the quarterly statistics reveal YoY price increases in 25 provinces during Q1, including in Barcelona (8.9%), Albacete (7.6%), Madrid (7%), Lleida (6.5%), Santa Cruz de Tenerife and Girona (both 5.9%). The YoY increase also exceeded the Spanish average (1.4%) in 12 other provinces.
The most acute decreases at the provincial level were recorded in Álava, Teruel and Jaén, with YoY reductions of 7.8%, 6.7% and 6.3%, respectively. Price decreases also exceeded 3% in the provinces of Córdoba, Pontevedra, Palencia, Burgos and Zaragoza. (…)
Original story: El Mundo
Translation: Carmel Drake