HOME prices in Spain are rising at the fastest rate in a decade, according to a leading quantity surveyor – although they still remain far more affordable than at the height of the housing boom in 2007.
According to figures by valuers Tinsa, the average residential property rose in price by 5.8% in the final quarter of 2018 – the highest increase seen per three-month period since 2007, a time when a typical home in Spain was worth €2,044 per square metre.
Prices are lower now by around a third – at €1,337 per square metre – although regional variations are vast, with per-square-metre prices differing by several hundred per cent just a few streets apart.
Home values reached rock bottom in the first quarter of 2015, Tinsa reveals, but have since gone up by an average of 11.7% and are now worth around the same as in the first three months of 2013.
Although 11 provinces in Spain registered a drop in price year on year between the final quarter of 2017 and that of 2018, these falls were in general less than 5%.
Madrid has seen the greatest percentage increase in the last quarter, at 10.8%, followed by the Comunidad Valenciana at 7.8%, Asturias and Castilla y León at 7.4%, and Aragón at 7.3%.
And the Greater Madrid region also boasts the highest prices in Spain as at the end of 2018, although these vary across towns and, in the capital itself, across neighbourhoods.
On average, a residential property in the Greater Madrid area would set buyers back €2,306 per square metre or, for a typical spacious three-bedroom apartment, €230,600.
The Balearic Islands is the second-most expensive region – again, with considerable fluctuation by area and island – at €2,145 per square metre, ahead of the Basque Country, with values of around €2,026 per square metre.
These are the only three regions at present with an average price for a 100-square-metre home exceeding €200,000, although anyone seeking a real bargain should head to the land-locked western region of Extremadura – enjoying the same type of weather as the southern territory of Andalucía, the two provinces of Badajoz and Cáceres, bordering onto Portugal, are home to some of the cheapest residential buildings in Spain, at just €769 per square metre, or €76,900 for a 100-square-metre property.
Castilla-La Mancha is not far ahead at €790 per square metre, and La Rioja in the far north, although still among the cheapest, is still some distance away in price at €895.
At present, the average time taken to sell a home anywhere in Spain in the last three months of 2018 was 7.9 months, although this differs vastly by location, with the more sought-after areas at either end of the price scale seeing homes snapped up much more swiftly.
By cities, the quickest sales were seen in Madrid, averaging at three months, and Zaragoza (Aragón) at 3.7 months, whilst Sevilla metropolitan area homes took 4.9 months to shift and those in Valencia provincial capital, six months – selling faster than homes in Barcelona, which were on the market for a typical 6.4 months.
Homes in the northern region of Cantabria or in the northern provinces of Ourense (Galicia) and Salamanca (Castilla y León), and in Castellón on the east coast, spent the longest on the market before being sold.
Time of year also makes a difference, however, with spring and summer seeing residential property in coastal provinces shifting faster, especially where these are suitable for holiday home use.
Current home values mean the average mortgage in Spain at the moment sits at €121,737 and the typical monthly repayment being €564, based upon a 20-year loan.
Tinsa reveals that monthly mortgage repayments swallow up around 17.2% of gross household income in the first year, but with the Eurozone interest rate – the Euribor – not expected to rise above 0% in the near future, mortgages remain affordable and the biggest barrier for those not yet on the property ladder is saving up a deposit: for a first home, banks normally lend a maximum of 80% of the lowest out of either the sale price or the market value, net of the 12.5% in taxes and fees required in addition.
For anyone who already owns a property or has some equity to begin with, mortgage repayments are not expensive and, even though values have soared and are expected to continue rising, residential property in Spain remains excellent value, particularly for those who do not need a mortgage at all.
In terms of sale volumes, between the final quarter of 2017 and the end of September 2018, a small year-on-year increase was seen – from 2.18 purchases per 100 homes to 2.24 per 100, according to Tinsa – of which the greatest movement was seen in the popular expat and tourism belts of the Costa del Sol and Costa Blanca, with purchases totalling 3.79 per 100 homes and 3.43 per 100 respectively.