Spanish Residential Property Market Robust

Spanish residential property prices rose by 2.4 per cent in the year to September 2017 according to the latest available data from the Association of Spanish Notaries.

Average square metre prices for Spanish residential property rose to €1,331 at the end of September, an increase of 2.4 per cent year-on-year from the level in September 2016.

Apartments led the way, rising by 3.8 per cent over the year, whilst detached properties were slightly behind with an increase of 1.4 per cent.

Spanish residential property sales also showed a marked increase, up 8.9 per cent on average across the country.

Mortgage lending for Spanish residential property also rose over the same period, with the average loan in September reaching €163,330, a rise of 4.6 per cent year-on-year.

These latest figures further confirm the recovery of the Spanish residential property market, following similar findings from other Spanish property price indices.

The Fomento index based on valuations was up 2.7 per cent in the third quarter of the year, whilst the Association of Spanish Registrars showed an even greater rise of 6.82 per cent. Notaires index was up 2.4 per cent in September, Tinsa up 4.3 per cent in the same month, and Idealist up 5.6 per cent in November.

Mark Stucklin of Spanish Property Insight said: ‘The national indices don’t tell us anything about the direction of prices in local markets, but they do at least give us an idea of where we are in the property market cycle. Whereas a few years ago they were all in negative territory, they are all now in positive territory and pointing up, showing that the years of price adjustment are behind us.’

He continued: ‘Indeed, the price data published in November was the most positive in more than a decade. If the current cycle performs like the past, we can expect several years of rising Spanish property prices ahead of us.’

However, the report found that despite recent increases Spanish residential property prices still sit way below their peak, leaving further room for property price growth.

For example, average residential property prices in Barcelona are still 8.4 per cent down, Madrid 20.4 per cent, and Malaga 25.6 per cent down from peak levels. Other provincial capitals such as Lleida, Zaragoza and Castellón still offer residential properties at below half their peak price level.

The report expects the upward trend in the Spanish property market to continue over the short term in the main property market segments, driven by a positive economic situation and increasing interest from overseas property investors.