The rise in house prices in Spain continues despite a decrease in demand for real estate and a weakening in construction activity, according to the Global Property Guide report.
Real estate prices
In the 3rd quarter of 2024, prices for apartments and houses in the country increased by 8.72% (7.11% adjusted for inflation) compared to the previous year, according to Idealista. In 2023, real estate prices rose by 8.16% (4.9% adjusted for inflation).
The National Housing Price Index of the National Institute of Statistics (INE) showed an increase of 7.85% (4.27% adjusted for inflation) year-on-year in the 2nd quarter of 2024. In the secondary market, prices rose by 7.27% (3.71% adjusted for inflation), in the primary market by 11.22% (7.54% adjusted for inflation).The largest price increase in the 2nd quarter was observed in Navarre (10.3%). It is followed by Aragon (9.85%), Andalusia (9.53%), Ceuta (9.47%), Cantabria (8.64%), Valencian Community (9.47%), La Rioja(8.61%), Canaria(8.51%) andPais Vasco(8.46%).
A significant increase in house prices was also recorded: in Murcia (7.49%), Asturias (7.37%),Madrid(7.18%), Melilla(7.18%), Castile and Leone (6.87%), Galicia (6.72%),Catalonia (6.68%), Balearic Islands(6.18%), Extremadura(6.17%) and Castile-La Mancha(5.28%).Market history
Residential property prices in Spain fell from the 3rd quarter of 2007 to the 1st quarter of 2015 by 36.3% (-42.9% adjusted for inflation). They have been recovering since 2015.
From 2015 to 2019, housing prices rose by an average of 2.5% per year (1.6% adjusted for inflation).After a slight decline of 1.85% (-1.13% adjusted for inflation), in 2020, due to the negative impact of the COVID-19 pandemic, the Spanish market quickly recovered: prices increased by 4.43% in 2021 and by 3.25% in 2022.In 2023, the price increase was 5.32% (1.99% adjusted for inflation).Home sales
The continued rise in housing prices is surprising to experts, as demand is declining.According to the National Institute of Statistics (INE), in 2023, sales of apartments and houses in Spain fell by 9.9% to 586,037 units compared to the previous year. This was preceded by an increase of 14.8% in 2022 and 34.8% in 2021, as well as a decrease of 16.9% in 2020 and 2.4% in 2019.
Demand for real estate remains weak this year.In the first seven months of 2024, home sales decreased by 1.3% compared to last year and amounted to 356,525 units.
The largest year-on-year decline in sales was observed in the Balearic Islands(-12.8%), as well as in the Basque Country(-3.7%), the Canary Islands(-3.5%), Madrid(-3.4%), Андалусии (-3,2%), Каталонии (-2,8%), Мелильи (-2,7%), Валенсии (-2,5% ) and Extremadura(-2.4%).
"Golden Visa"
The program "Golden visa", valid since September 30, 2013, is of interest not only in the Middle East, but also in Asia and Russia.Any citizen of a non-EU country who invests more than 500,000 euros in residential or commercial real estate, automatically receives a residence permit in Spain.
In total, from 2014 to 2021, the authorities issued 7,425 "golden visas" to the main applicants, while the Chinese and Russians accounted for 32% and 25%, respectively.
Although no official data has been published over the past two years, experts say that interest in obtaining a Spanish residence permit through real estate investments is growing again.
The Golden Visa program has been criticized by some Spanish politicians. Earlier this year, the government proposed an amendment to the legislation abolishing this scheme, citing concerns about its negative impact on the housing market.The amendment is currently being implemented. While you can still use the program!
Source: Global Property Guide
