Five Spanish cities: Key housing market metrics

Barcelona, where house prices have surged ahead of the rest.
Barcelona, where house prices have surged ahead of the rest.

Prices are an important part of understanding any market, but a recent report by the appraisal company Tinsa looks beyond just house prices to other key metrics that give insight into the housing market.

Taking the five biggest cities in Spain (Madrid, Barcelona, Seville, Zaragoza, and Valencia), Tinsa looked at the following metrics at the end of June (see table below):

Five Spanish cities. Housing market metrics from Tinsa
Five Spanish cities. Housing market metrics from Tinsa

1. House prices in euro per square metre
Barcelona is the most expensive city in Spain when you look at the cost of buying a square metre of living space. Barcelona is 19% more expensive than Madrid, and 121% more expensive than Valencia.

2. Annualised change in house prices
Not only is Barcelona the most expensive city in Spain, it’s also where house prices are rising the fastest, up 7.4% in June year-on-year, compared to a decline of 5% in Zaragoza. Prices barely rose in Madrid.

3. The affordability ratio, or financial effort required to buy a home
Tinsa defines housing affordability as the percentage of gross household income spent on paying the first year’s mortgage repayments: 24% in Barcelona, and as low as 13.6% in Zaragoza. In the boom years, the national average was 33%, which shows that housing has become much more affordable in Spain.

4. Time on market, or market liquidity
The average time it takes to sell a property is a measure of how liquid a market is. The more liquid a market is, the easier it is to sell, which reduces risks and increases prices, in a virtuous circle. Madrid is the most liquid market in this study, with an average time on market of 6.1 months, compared to 14.3 months in Valencia.

5. Planning approvals
Planning approvals to build new homes are up a remarkable 319% in Barcelona, as funding finally starts to flow towards new developments in the city. In Madrid, where new development picked up earlier than Barcelona, planning approvals fell 2.6% as the pace of new projects slowed down, whilst in Seville, new development plunged 71.4%, probably because the level of new building is so low that small changes can make a big impact in percentage terms.

Tinsa also looked at the typical property price in each area, identifying the budget bracket with the biggest number of transactions. At a national level, 31% of sales in Spain are priced between €50,000 and €100,000, and this is the most common price range in almost all Spanish provinces. The exception is Barcelona province, where 24% of sales – the biggest group – are priced between €100,000 and €150,000, with just 19% in the lower price bracket.

In the Balearics, where two separate markets coexist – a luxury market for foreign buyers and a normal market for local buyers – 19% of sales are priced over €400,000, compared to 5% at a national level.

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