24 January 2019 – Expansión
Second-hand housing is continuing to spearhead growth in the residential market. Not only because it accounts for more than 80% of all house sale operations, but also because it is the segment where prices are increasing by the most.
The price of second-hand homes rose by 7.8% at the end of 2018, recording the highest increase in 13 years, since 2006, before the crisis, according to data published yesterday by Fotocasa. Taking into account the fact that the online portfolio started monitoring house prices in 2006, it is the largest annual increase in the historical series. Although the prices of second-hand homes have not stopped growing in month-on-month terms for 27 months – more than two years – in 2018, they rose at a rate never before seen.
The awakening of latent demand, investor appetite and the profitability of rental properties in the context of low interest rates explain why interest has returned to property purchases, with the consequent impact on prices”, explained Beatriz Toribio, Head of Research at Fotocasa.
Despite the increases, the average house price stands at €1,869/m2, the level last seen in 2013, when the residential sector had not yet started to recover. House prices peaked in April 2007, when the price per square metre reached €2,952/m2, 36.7% higher than it is now (…).
Even though prices are still well below their historic maximums, the evolution of the market varies by area. Although the increases were widespread across almost the whole country in 2018, Toribio explains that “the intensity of the increases is very different, and there are even areas where slight decreases were registered”. Madrid is the province where prices increased by the most, specifically, by 19.5%, followed by Las Palmas (13.8%), Santa Cruz de Tenerife (12%), Alicante (11.3%), Barcelona (10.5%) and the Balearic Islands (10.4%).
The Spanish market continues to grow at various speeds, with large cities driving prices and sales. Guipúzcoa, Barcelona and Madrid are the most expensive provinces in Spain, with prices per square metre of more than €2,880/m2.
By contrast, the provinces that are suffering from depopulation and ageing demographics are recording significant price decreases (…). Toledo is not only the province that has recorded the largest decrease in prices since the peak (-55%), it is also the cheapest, with prices of €948/m2. It is followed by Ciudad Real, where second-hand homes are going for €990/m2.
Original story: Expansión (by I. Benedito)
Translation: Carmel Drake