The house price index, or HPI, gives us a useful mechanism for looking at changes in the prices of houses sold over time. Information is collated from Spanish notaries meaning it accurately reflects all transactions from across the country.
So what are the most recent HPI figures telling us?
What’s the overall picture for Q1 2019?
The official house price index figures for Q1 2019 have confirmed Spain’s continued housing recovery. Having fallen sharply in 2007/8, and stayed fairly stagnant until 2013/4, prices have been rising slowly but steadily over the last five or so years. The figures from quarter 1 2019 show that house prices in Spain are up 6.8% year on year, both for new builds (10.4% growth) and resales (6.2% growth). This represents a continuing upward trend and another successive quarter of house price rises.
Which areas are driving growth?
Rising prices are being driven to a large extent by the highly populated cities of Madrid (which has seen a rise of 9.7%) and Barcelona (7.6%), and also the Balearics (6.4%). Strong price growth has also been seen in Aragon (7.3%), La Rioja (6.2%), Andalucia (5.9%) and Basque Country (5.8%). Many of these areas have seen successive quarters of impressive price rises.
And what about recovery?
Since the 2008 crash, we’ve seen particular areas of Spain jostling for recovery. Many regions are performing well and are seeing prices that are no longer significantly below their pre-crash levels. The most recovered regions over the last ten years or so are the Balearics and Madrid, unsurprising given the continued high price rises reported. Comparing prices to their pre-crisis peaks, the Balearics is now just 10.2% below its all-time high, as well as Madrid is just 12.9% shy of its peak. Andalucia is also moving closer to full recovery with only a 15.5% deficit.
But not all areas are faring so well. On the opposite end of the scale, Navarra’s prices remain around 40% of what they were before the crisis. It’s not all doom and gloom up in the north, however, Navarra’s property prices may not be as high as they once were, but the area is still showing good signs of recovery which means it’s still not a bad place to invest.
What does this mean for you?
As expected, Spain’s housing market has seen continued growth in 2018 as well as in the first quarter of 2019, and it is most likely that this trend will continue.
As agents, you can continue to feel confident about the prospects of Spanish property and reflect this positivity to potential buyers. By understanding these HPI figures and sharing the data with potential investors, you may even be able to convince those who are reticent to commit due to current political and economic turbulence, that now is, in fact, a great time to invest.
See: Tips for selling property to the UK in the midst of Brexit for more info.
Keep an eye on Kyero’s Market Insight for more useful data.