The SPI House Price Index Tracker plots the six most-watched Spanish house price indices on one chart (above).
Only four of the six indices were updated in the third quarter, two of them looking back at prices in the second quarter, but they all show Spanish housing prices increasing in the period they cover.
Despite their different methodologies we can see a similar pattern of house prices cooling in 2019 before turning sharply down in the first half of 2020 as the coronavirus pandemic took hold, then starting to recover in the second half of last year. By the first half of 2021 all of them were back in positive territory.
In detail, the following residential property price indices were updated in the third quarter of 2021 (all figures show latest year-on-year percentage change):
- The National Institute of Statistics (INE) based on data from the Land Registry +3.3% in Q2
- The Spanish government (MITMA) based on valuations +2.4% in Q2
- The Tinsa index based on property valuations carried out by the company +2.9% in Q3
- The Idealista.com (property portal) resale asking price index +4% in Q3
Spanish house price change by region: August 2021
The notaries also publish data on house prices by region. Although figures for Q3 are not yet available, they have published figures for August, which gives us an idea of where prices are heading on a regional basis (next chart).
As the chart above shows, house prices are rising strongly in most regions of interest to foreign investors, with the exception of Catalonia and Murcia.
Once again prices were up by double digits in the Balearic and Canary islands, presumably due to factors such as a scarcity of homes for sale, and a shift upmarket, especially in the case of the Balearics. The pandemic might also have increased interest in homes on islands that are perceived as offering greater protection from the virus.
The housing market in Andalusia appears to be buoyant at present, perhaps in part due to steps taken by the regional government to reduce taxes on property, as explained by lawyer Raymundo Larrain in his recent article Andalusia lowers taxes including Property Transfer Tax and Stamp Duty in move that will boost the market.
In Catalonia, in contrast, the regional government charges the highest taxes on property in Spain, encourages the biggest squatter problem in Spain, and has recently introduced measures to control rents, and discourage investment. These factors might help explain why house prices in the region are more subdued than other parts of Spain.