The price of housing chains five quarters on the rise and touches levels of a decade ago | Economy

The price of housing on the free market in Spain has been growing for five consecutive quarters with increases of more than 3%. Consequently, the value of the houses stood at the end of June at 1,474 euros per square meter. Although the figure is still a long way off –exactly 31% below– the maximum reached in the months prior to the outbreak of the 2008 financial crisis, it is gradually approaching the levels recorded around 2012, when the real estate boom broke the housing market in the country.

Between April and June of this year, specifically, the price of real estate registered an increase of 3.5% compared to the same period in 2021. This is shown by the latest data from the consultant and appraiser Gesvalt, which has presented this Tuesday your Housing Report for the second quarter. With this new increase, five consecutive periods with increases of more than 3% are chained after four previous increases of 3.7% (two consecutive quarters), 3.9% and 3.3%.

The company’s experts continue to relate this trend to the decrease in health uncertainty linked to the Covid-19 pandemic and the response to the price contractions that occurred in 2020.

To these factors, we must also add the increase in the prices of construction materials and labor, as a result of the current inflationary scenario and the rise in rates by the ECB. These cost overruns, as they have been alerted from the real estate sector, are gradually being transferred to the final price of homes so that the profit margins decrease as little as possible, also taking advantage of the savings that families managed to accumulate during the pandemic.

In this sense, the Gesvalt experts are cautious before making estimates about how these factors may impact demand in the future and, therefore, the market balance. Despite this, and with the prudence that prevails at a time of strong economic and geopolitical instability, experts maintain that prices will stabilize throughout the second half of 2022.

For now, and waiting for what will happen in the coming months, the upward trend is being generalized throughout Spain, since progress has been made in all the autonomous communities with the exception of Galicia and Aragón, with timid falls that they do not reach 1% year-on-year. The islands have once again led, for the second consecutive quarter, the ranking of regions with the greatest increases, with 6.7% in the Balearic Islands and 4.9% in the Canary Islands. Within the peninsular territory, Castilla-La Mancha has been the one that has experienced the greatest increase, with 3.3%, followed by the Community of Madrid, with 3.2%, and the Valencian Community, with 3%. In the Basque Country, the advance has been 2.7%, in Catalonia, 2.6%, and in Andalusia, 2.2%.

In absolute figures, this latest registered rise means that a home with an average value and an area of ​​90 square meters has a price of 132,660 euros, compared to the 128,160 euros it cost in June 2021. In the Balearic Islands, this same home would reach today 224,600 euros, while in the Canary Islands the price would be around 132,000 euros. Only in Galicia, the cheapest region to buy, a typical house would be below 100,000 euros.

By provinces, in addition to the Balearic Islands and Madrid, the highest prices are recorded in Guipúzcoa, with 2,776 euros per square meter and an annual increase of 2%; in Vizcaya, with 2,345 euros and a rise of 1.3%; in Malaga, with 2,176 euros per square meter and an annual increase of 6%; and in Barcelona, ​​with 1,931 euros and a rise of 0.3%.

rental market

The increase in the price of housing is also transferred to rent. In the second quarter of the year, the general increase in rents has caused, in fact, that the only province that sets its average below 5 euros per square meter per month is Jaén. Thus, some provinces traditionally not very hot in this market, such as Teruel, registered annual increases of around 12%. Other more demanded, such as Malaga, Castellón, Alicante or Almería, range between 10% and 12%. On the contrary, the only three provinces that show contractions are Lérida (-4.3%), Granada (-1.8%), and Huesca (-1.5%).

With regard to the total price, the province of Barcelona (with 17.24 euros per square meter) once again leads the ranking, being the only one that exceeds the barrier of 16 euros. Madrid is in second position, with around 15.5 euros per square meter, followed by Guipúzcoa (14.67 euros) and the Balearic Islands (14.11 euros per square meter per month).

the great capitals

Barcelona. In Spain there are only three cities where rental prices exceed 15 euros per square meter per month. The most expensive is Barcelona, ​​where the value of this surface is 21 euros, taking a standard house of 90 meters to 1,890 euros. In sale, the value per square meter reaches 3,423 euros.

Madrid. Renting a home in the capital implies spending an average of 18.25 euros per month, that is, about 1,642 euros for a medium-sized house. In the sale, the value amounts to 3,145 euros.

Saint Sebastian. The Basque city barely exceeds the barrier of 15 euros per square meter per month in rent, taking the average income to 1,422 euros. In sale, the price is 4,039 euros.