Every few months we take a look at the House Price Index (HPI) with you, in order to share our current analysis of the market. The information is collated from Spanish notaries, and includes all housing market transactions that have taken place across the country in the preceding three months.
This data allows us to look for trends in selling prices, and to compare market growth in different areas. We know our agents find this information extremely useful; it helps them to prepare and make investment decisions for the coming periods.
So let’s look at the HPI figures for Q2 2019.
More good news for real estate agents in Spain
Once again, the house price index figures are trending upwards, giving us another successive quarter of house price growth. The figures from quarter 2 2019 report that house prices in Spain are up 5.3% year on year, both for new builds (7.2% growth) and resales (5% growth). This follows the pattern previously seen of slow but steady house price increases since around 2014. It is undoubtedly positive news for real estate agents operating within both the domestic and international markets.
Which areas are driving growth?
While in recent quarters we’ve seen price increases driven by higher priced regions such as the Balearics and larger cities such as Barcelona and Madrid, there is a definite shift occurring. As the capital city, it is unsurprising that prices continue to rise strongly in Madrid, up 6.5% annually, albeit showing 3% slower growth in this quarter than the last.
But neither Barcelona (Catalonia) nor the Balearics appear among the top five regions in terms of annual house price rise in Q2. Instead regions driving growth are Aragon (6.7%), La Rioja (6.2%), Andalucia (5.6%) and Murcia (5.5%).
How does this impact the country’s recovery?
Spurred on by strong price rises in some regions we’re continuing to see good patterns of recovery, with many regions now reaching over three quarters of their peak pre-2008 crash prices. In fact, this quarter the Balearics have tipped over the 90% mark; reported house prices are now within 10% of the peak in the region.
Meanwhile, house prices in Madrid are just 12.7% below their peak, and in Andalucía just 14% below. On the other end of the scale, while we’re seeing prices in Navarra occasionally rise above 60% of their pre-crash high, that’s not to say the area is not experiencing signs of growth. We are still positive about the recovery in that region.
What are our predictions and how should you react?
We have now seen Spanish house prices rise continually for a long period, and we have no reason to believe this trend will not continue in the near future. We also expect to see a continuation of the trend for growth in mainland regions with easy access to the coast, as buyers look away from the more highly priced islands.
When you’re conducting viewing trips with potential buyers, who are perhaps feeling nervous about the current economic and political climate, make sure you share with them the continued positivity in the market.
Perhaps even share the data with them to prove to potential buyers that now is in fact a very good time to invest.
Don’t forget to check back regularly for more market insights and up-to-date reports from Kyero.