Alex Trelinski
HOUSE prices are continuing to boom in Spain with new properties soaring by 11.7% in the second quarter of this year- the biggest rise since the third quarter of 2007.
Overall prices grew by 7.3% between April and June compared to a year earlier according to the National Institute of Statistics(INE).
Second-hand properties continued to go up with an increase of 7.3%.
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The Official Association of Real Estate Agents said in a statement: “It is logical that the price of housing continues to rise both in new and second-hand construction as the population continues to increase; materials and financing have become more expensive; and supply has not grown in tandem with demand.”
It pointed out that the biggest supply issues are in the main metropolitan areas of Spain, where more than 36% of the population lives.
The official NIE figures published on Thursday, include a base index of 100 that takes as a reference what a home was worth in 2015.
That indicator has gone above 158 points, which means for example that flats are 58% more expensive than nine years ago.
The figure easily exceeds the 151.7 points reached in the real estate bubble in 2007, as well as the 152 mark achieved in the first quarter of 2024.
Looking at the regions in the second quarter, Navarre led the year-on-year increase with a rise of 10.3%, closely followed by Aragon (9.9%), Andalucia and Ceuta (both with 9.5%).
Other areas such as Cantabria, the Valencian Community and La Rioja registered hikes of 8.6%.
Prices in provincial capitals and areas with strong foreign tourism has seen the greatest leaps in the last decade.
In Madrid, properties are 74% more expensive than in 2015, with the Balearic Islands up by 72% and a 66% rise in Catalunya.
The supply of new housing is simply unable to meet demand driven by foreign buyers and investors and prices are almost certainly going to carry on rising according to analysts.
Some regional governments like the Balearics and Canaries are even considering stopping purchases by foreigners so that ‘locals’ can get on the property ladder.
