Resicom – Holiday Investment – 04-21 – LB

Spanish Property Values Continue Rising

The latest data from Spain reveals that real estate values rose during January, giving many investors optimism over making future purchases. In the new figures from Tinsa, the property appraisal organisation, it was shown that the largest growth has been noted for the Canary and Balearic Islands, with a year-on-year increase of 3.2 per cent and a monthly rise of 5.4 per cent. Although values are still well below their 2007 peak, they are on the rise and offer attractive deals.

Overall, Spain’s property prices have risen by 2.9 per cent from December 2015; meanwhile, a 1.1 per cent year-on-year increase has been experienced. As expected, there are regional differences and variations between urban and rural locations. Large cities have benefited from the highest gains, with property values up by 2.9 per cent; meanwhile, a 1 per cent gain has been seen along the Mediterranean coast and a 0.8 per cent rise was experienced for metropolitan areas. Small towns have not done so well, however, with the average price dropping by 2.2 per cent year-on-year. Despite this, there was a small monthly gain.

For investors looking for opportunities, Tinsa’s data reveals some interesting finds; for example, the recession took its toll on Spanish property, with average prices still 41 per cent below their peak in 2007. This means that even though values are rising, they can still be seen as a good deal. There are also regional differences; for example, large cities are down by 44.2 per cent, metropolitan areas by 43.5 per cent and homes on the Mediterranean coast by 48 per cent. A smaller gap is noted in the Balearic and Canary Islands, with a 29.1 per cent shortfall against peak prices being seen.

The data from Fotocasa, the property portfolio, also shows a positive outlook for Spanish property. The organisation revealed that January had shown a 0.3 per cent rise in second-hand housing value, with the average price now at €1,623 (£1,254) per square metre. The year-on-year index still indicates an average 0.3 per cent decline, however. It also states that average prices are down by 45 per cent since 2007’s peak; in addition, of the 17 Spanish regions, 12 have registered declines of over 40 per cent.

The largest declines have been noted in Rioja, where prices have plummeted by 54.7 per cent since 2007; meanwhile, Castilla-La Mancha, Navarra, Aragon and Murcia have noted 52.2 per cent, 52.1 per cent, 51.4 per cent and 50.1 per cent respectively. This is countered by the fact that average prices have gained for 10 regions throughout January 2016. Growth was up by 2.1 per cent in the Canary Islands and 1.2 per cent in Aragon.

In terms of cost, Spain’s most expensive region continues to be the Basque Country, where an average price of €2,730 per square metre prevails; meanwhile, Madrid and Catalonia cost €2,197 per square metre and €2,064 per square metre respectively.

Overall, it is positive news for Spain, with average values for real estate on the rise. Combined with the fact that prices are still well below the level seen in 2007, there are many opportunities for investors to make attractive deals for the future.

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