Spain house prices reach historic highs

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house prices

New-build homes in Spain have never been more expensive. In June, house prices rose by 4.3% year-on-year, bringing the average price to €2,930 per square metre.

This means that a new-build home of 100 square metees now costs an average of €293,000, an increase of €12,100 compared to last year. This data comes from a report by the Appraisers Association, which also notes that the rate of price increases has slowed for the sixth consecutive quarter.

Regional variations in price increases

Price increases have been observed across all autonomous communities, albeit to varying degrees. The Balearic Islands and the Comunidad de Madrid experienced the highest increases, with 5.7% and 5.2% respectively. Other regions such as Catalonia, Andalucia, the Basque Country, the Comunidad Valenciana, and Navarra also saw significant increases of around 4%.

Conversely, the smallest price increases were in Castilla-La Mancha (2.2%), Extremadura, and Asturias (both 2.4%). Regions like Galicia, Castilla y León, and Murcia saw price increases ranging from 2.7% to 3.3%.

Most expensive and affordable regions

The most expensive regions for new-build homes are Catalonia (€4,662 per square meter), Comunidad de Madrid (€4,493), and the Basque Country (€3,240). On the other hand, the most affordable regions are Extremadura (€1,333), Murcia (€1,457), and Castilla-La Mancha (€1,587).

Future price increases expected

Experts from the Sociedad de Tasación predict that new-build home prices will continue to rise in the coming months due to a shortage of newly completed homes. “Sellers have more negotiating power compared to buyers. This means that new-build home prices will keep rising, and in some Spanish cities, they will come close to historic peaks,” said Consuelo Villanueva of the Appraisers Association in El Economista.

Price trends in provincial capitals

In nine provincial capitals, including Barcelona, Madrid, and San Sebastián, prices have reached all-time highs. Barcelona has the highest prices at €5,262 per square metre, followed by Madrid (€4,493) and San Sebastián (€4,378). The most affordable capitals are Ciudad Real (€1,314), Cáceres (€1,327), and Badajoz (€1,337).

Affordability and accessibility

The Accessibility Index, which measures the balance between average house prices and borrowing capacity, rose for the second consecutive quarter to 78 points, with 100 being the equilibrium level. This is the same score as twelve months ago and an improvement of three points from the first quarter. This improvement is mainly driven by the announced interest rate cuts by the ECB and better lending conditions from banks.

Construction costs and sustainability

Construction costs for new-build homes rose by 9.1% in the first half of the year to €1,310 per square metre. Interestingly, 72% of new-build homes received the highest rating for emissions reduction, while 51% achieved the highest energy efficiency rating, a decrease of 15% and 5% respectively.

Also see: Spanish housing market 2024

ASSSA

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