New homes still just 10pc of the Spanish property market

Property price stability, the dominance of resale properties (9 out of every 10 purchases) and the 20% increase in sales between 2016 and 2017 are some of the main highlights from the latest Euroval Property Situation Report. It examines key aspects of property activity in Spain during Q1 2017.

Adapted translation of an article published by El Mundo

Regarding property prices in provincial capitals, the report concludes that in general terms, square metre prices are going down, but only slightly to the point that they’re almost stable. Specifically, the highest prices fell around 4% compared to 2016 to around €2,765 a square metre. The lowest prices followed a similar pattern and fell to €568 per square metre, 5% less than in the first half of 2016.

In 23 provincial capitals, both the highest and lowest prices have come down, as is the case in Santander, La Coruña and Cadiz. Just 7 provincial capitals registered an increase, for example, San Sebastián, Gerona and Granada. In 11 capitals, prices remained stable with slight drops and in 8 they remained stable with slight rises.

Regarding property sales, the report states that in 2014-15 they rose by 10%, in 2015-16 by 14% and it estimates an increase of almost 20% in 2016-17. Per region, the lowest increase was in the Basque Country and the highest in Castilla-La Mancha.

Per property type, sales of new builds went down while those of resales went up. Just 1 in 10 sales was a new build, which partly explains the slow decrease in new-build supply and lack of new development.

Andalusia had yet again the highest number of sales with 18% of the total. Catalonia, Madrid and Valencia come next and they, together with Andalusia, make up almost 65% of all sales in Spain. In contrast, the region with the lowest transactions is La Rioja with less than 1%, followed by Cantabria, Extremadura, Asturias and Murcia with less than 2%.

Madrid has highest sales to population ratio

In terms of population, the region with the highest number of sales is Madrid. Exactly 81 sales per 1,000 inhabitants, followed by Valencia with 72 and Catalonia with 69. The region with the least is Asturias with almost 2 sales per 1,000 inhabitants followed by the Balearics with 2 and Navarra with 3.

The Q1 2017 report includes annual rental prices for the first time. The most expensive rentals (over €7,000 a year) are in the Balearics, Barcelona, Guipuzcoa, Madrid, Malaga and Vizcaya. Rentals between €5,600 and €7,000 a year are considered to be average and found in Alicante, Cadiz, Cantabria, Gerona, Granada, Huelva, Las Palmas, La Rioja, Navarra, Salamanca, Sevilla, Tarragona, Tenerife, Valencia, Valladolid and Zaragoza.

In the words of Euroval president, José Vázquez Seijo, “our Property Scenario Report allows us to pinpoint some of the main trends in the Spanish residential market. Despite the lack of new development and a clear shift towards rentals, we can conclude that the property sector is currently in a cycle of stability.”