The latest annual report by appraisal company Tinsa reveals that house prices in coastal districts rose by an average of 5.7pc over twelve months to the end of the first quarter, despite a decline in demand.
The 55-page report looking at the housing market on all the Spanish coasts and islands in the last year is now available (in Spanish only) at the Tinsa website here.
The main findings of the report are as follows:
- Despite the decline in demand, the residential market on the coast maintained its upward price momentum in 2023, with a 5.7% year-over-year increase in the first quarter of 2024, reaching 1,740 €/m², compared to the national increase of 3.3%
- Coastal vacation homes saw their average price rise by 3.9%, reaching 2,650 €/m². This is a more moderate increase than that of primary residences, where the distinction between residential and vacation use is becoming less clear
- The highest increases in housing prices (both primary and secondary residences) were found in Artá (+23.2%), Llucmajor (+15.5%), and Sant Lluís (+14.5%), all located in the Balearics
- Two municipalities on the island of Ibiza have surpassed the 2007/2008 price peaks by more than 30%, and in another 20 municipalities, the increase exceeds 10%
- In 2023, property sales in coastal municipalities fell by 11.2% compared to the record year of 2022. New construction permits in these municipalities decreased by 22.9%
- The importance of foreign demand in total transactions has increased, reaching levels not seen since 2016. Additionally, there is a rise in purchases for rental exploitation and the involvement of professional buyers
In the report Tinsa argues that there are no widespread signs of overvaluation in the coastal market, except for specific and minor areas in the islands and on the Mediterranean Coast. Similarly, no price corrections are expected for second residences; if any occur, they are expected to be minor and insignificant.
“Only in Ibiza is there evidence of overheating, with an extreme tension in prices and an increasingly concentrated demand in the luxury residential segment,” says Andrea de la Hoz, Senior Consultant at Tinsa’s Research Service.
