Eurostat: House Prices Rose by 6.2% in Spain in 2017

11 July 2018 – Eje Prime

The acceleration of the housing market has placed Spain amongst the leading countries in Europe in terms of price rises. In fact, in just one year, the country has risen from 21st position, with an average increase of 4.6% in 2016, to 12th , with an average increase of 6.2% last year.

In 2016, Spain already exceeded the average rise for the European Union as a whole, which amounted to 4.6% at the time, but in 2017, it distanced itself further from the average, moving closer to the group of countries with the highest rises in prices: whilst in Spain, the increase amounted to 6.2% in 2017, the average rise for the European Union as a whole was 4.4%.

Spain outperformed Austria, where prices rose by 8.5% in 2016 (in 2017, they only increased by 5.3%); Norway, which went from an increase of 7.9% in 2016 to 5.4% in 2017; and the United Kingdom, where house prices increased by 7% in 2016 and by 4.5% in 2017.

Iceland, the Czech Republic and Ireland were, in that order, the three markets where house prices rose by the most in 2017, with rises of 19.5%, 11.7% and 10.9%, respectively. Iceland was the only country to feature in the top 3 in both years; in 2016, it was joined by Hungary and Sweden.

Several countries from Eastern Europe, such as Lithuania, Latvia, Bulgaria, Slovenia and Hungary (with high volatilities in terms of the evolution of house prices) were amongst the most inflationary in terms of house prices in 2017, together with countries in Western Europe, such as Portugal, where prices rose by 9.2%; the Netherlands (7.5%) and Sweden (6.4%).

At the opposite end of the spectrum, the only European country where house prices decreased in 2017 was Italy, with a reduction of -0.8%. It was accompanied by moderate price increases in Finland (1.6%), Cyprus (2.2%), France (3.6%) and Croatia and Poland (both 3.8%).

The figures from Eurostat, the European Union’s statistics office, include purchase prices of new and second-hand homes. According to the EU entity, these prices “have fluctuated significantly since 2006”. “The annual growth rate in the European Union as a whole was close to 8% in 2006 and 2007, followed by decreases of 4% as a result of the financial crisis”, it continued.

Prices started to increase in 2014, with an average cumulative rise across the whole of the European Union of 11% between 2010 and 2017, and of 6% in the Eurozone during the same period, according to Eurostat. In the case of Spain, despite the increases in recent years, the country has registered a cumulative decrease of 17% since the start of the century.

Original story: Eje Prime (by Christian de Angelis)

Translation: Carmel Drake

Tinsa: House Prices Rise in Madrid & Palma by 17% & 15%, Respectively, in Q1 2018

5 April 2018 – Expansión

The boom continues with an average price rise of 3.8% during the first quarter of 2018 / Rises in large capital cities and tourist areas boost house prices in a market that is still operating at several speeds. Nevertheless, Cataluña is showing signs of a slow down.

Madrid and Palma de Mallorca led the growth in house prices during the first quarter of the year, according to data published yesterday by the appraisal company Tinsa. Specifically, the city of Madrid saw price increases of 17% with respect to the same period last year, followed by the capital of the Balearic Islands (14.7%), Barcelona (11%), Pamplona (10.4%) and Logroño (10%). All of them contributed to an average increase in house prices across the country of 3.8%.

Despite the great motor that Madrid, many tourist areas and certain non-coastal cities represent, where demographic pressure is starting to push prices up again, the positive trend of the market as a whole is being weakened by the diminishing strength of Cataluña following the independence referendum on 1 October 2017. Whilst house prices in the Cataluñan capital rose by 20.6% during the third quarter of last year, that growth had moderated to 14.8% by the end of 2017 and to 11% by the start of this year.

This weakness corresponds to lower investment activity, due in part to a slowdown in tourism, as well as uncertainty, which has caused a delay in certain purchase decisions, such as the time it takes to sell a home (…).

Moreover, it is worth noting that whilst before house prices in Cataluña as a whole rose by 12.5%, now prices in the other three capitals are stagnating or falling, and prices in the region as a whole have slowed to an increase of 7.3%.

This situation is the opposite of what is happening in the Community of Madrid, where the increase in prices in the capital is driving demand out to towns on the outskirts. In this way, prices for the region as a whole are rising with similar strength to those in the city of Madrid (…).

Heterogeneous situation

The increases in the large capitals are not isolated, given that the rises are taking place in the most touristy areas, as well as in those areas where unemployment has decreased significantly. In this way, prices are rising by between 5% and 8% in capitals along the Mediterranean (only Gerona has seen its prices decrease), as well as in Andalucía and the Canary Islands, and in several cities in the Northern third of the peninsula (such as Vitoria, San Sebastián and Burgos); in the case of Sevilla, prices rose by 8.8% in Q1.

Nevertheless, within the real estate market as a whole, there are still many provincial capitals where house prices are falling, such as the case of Ciudad Real (where prices fell by -11.9% in Q1), followed by Cáceres (-9.2%), Guadalajara (-6.3%) and Lérida (-6.2%). Several factors explain those decreases, which are concentrated in the least populated areas and, which, therefore, have little weight on the overall market. Firstly, many of those cities have high levels of unemployment and the majority are experiencing population loss, which relieves pressure on the real estate market (…).

Original story: Expansión (by Pablo Cerezal & Juanma Lamet)

Translation: Carmel Drake