3 November 2018 – Expansión
In October, the residential market recorded its largest increase in 2018. House prices rose by 10.5% on average across Spain in year on year terms, after recording an average cumulative increase of 7.7% during the first nine months of the year, according to the latest data published by the real estate portal Idealista.
But although the growth is generalised across Spain, it is the large capitals that are driving the sector. “Prices are continuing to rise in a general way, but they are doing so at two speeds. Whilst in half of the markets, the YoY growth rates are in the single digits, it is the major capitals that are responsible for the YoY growth of more than 10% that is being seen across Spain as a whole”, said Fernando Encinar, Head of Research at Idealista.
House prices are rising at double-digit rates in 15 Spanish capitals. More specifically, Las Palmas de Gran Canaria, Madrid and Málaga are leading the charge. House prices in Las Palmas de Gran Canaria soared by 21.2%, the largest increase across the whole country, taking the average price there to €1,929/m2.
They were followed by Madrid, where, despite the overheating of the market (the average price of €3,827/m2 is only exceeded by Barcelona and San Sebastián), house prices rose by 19.2%. In third position, Málaga saw an increase of 18.8%, to €2,229/m2.
The residential sector in Málaga, which bottomed out in 2013, has been experiencing an increase in its recovery, boosted by its tourist appeal. “In addition to Barcelona and Madrid, certain other capitals, such as Málaga and Palma de Mallorca, are joining the previous two (…) with more acute increases than the rest, above 5% in all of them”, explain sources at Sociedad de Tasación.
Currently, the Málagan capital is one of those that makes up the second wave of cities that are leading the house price increases. “Despite these increases, none of the capitals has reached the peaks of 2007, with the exception of Palma”, added Encinar.
Finally, at the bottom of the pile are those inland provincial capitals, where depopulation and less economic dynamism are hampering the evolution of the sector.
Specifically, prices in Ávila fell by 2.4%, in Jaén by 1.6%, and in Teruel by 1.2%. Meanwhile, prices recorded moderate decreases in A Coruña, Oviedo and Ourense of 0.6%, 0.5% and 0.2%, respectively.
Nevertheless, the greatest correction in prices was experienced in Tarragona, with a decrease of 2.8%, in line with the deceleration of the market in Barcelona, where house prices rose by only 1.1%.
Original story: Expansión (by Inma Benedito)
Translation: Carmel Drake