House prices in Spain cost an average of €1,661 per square metre in the third quarter of this year. That is 2.6% more than in the third quarter of last year and almost as much as in 2011 when the average price per square meter was €1,701.
This is evident from recently published data from the Ministry of Transport, Mobility, and Urban Agenda. With the current figures and the fact that experts expect a further increase in the coming months, price stabilisation has come to an end during the worst phases of the corona pandemic. In 2020, the average price per square metre remained the same as in 2019.
Demand is greater than supply
Both new-build and existing homes have become more expensive at the moment because the demand for housing exceeds the available supply. Homes older than five years cost an average of €1,653 per square metre at the end of September, which is the highest price since the fourth quarter of 2011 (at that time €1,681 per square metre). A new-build home (built in the past five years) currently has to pay an average of €1,938.90 per square metre, the highest price since the first quarter of 2012.
There are currently more home buyers on the real estate market due to the money saved during the pandemic, the delayed purchase intention and the favourable mortgage interest rates. On the other hand, the supply is precisely limited by the supply problems and price increases of building materials and the shortage of qualified workers in the construction sector.
Real estate bubble not yet a real threat
Nevertheless, despite these developments in the real estate market and the sharply increased national mortgage debt, there is no imminent real estate bubble, say the Spanish Bank and the employers’ association for real estate appraisers. Homes were even more expensive in the first quarter of 2008, ie before the outbreak of the previous economic crisis, with an average of €2,100 per square metre. However, the Spanish Bank warns that a long-term shortage in the housing market will have the necessary consequences in the long term. According to experts, house prices will rise further in the coming months by a percentage of between 3% and 6%.
Read our previous article on house prices in Valencia and Costa Blanca areas.