Residential property prices in Spain have reached their highest level since August 2006, with significant increases observed in five provinces, according to recent statistics. The annual price rise across the country averaged 10 percent as of the end of April, equating to over €2,100 per square metre. For example; a medium-sized apartment with two or three bedrooms, ranging between 70 and 90 square metres, now has a market value of approximately €147,000 to €189,000.
This surge in property prices represents the largest recorded increase in nearly 17 years. However, experts in the real estate industry anticipate a slight decline in demand in the coming months, which should lead to more stable market values.
It is important to note that relying solely on the national average price provides limited information to prospective buyers. Even within a specific town, the average price does not capture the full story. Factors such as location, property type, local amenities, and the desirability of the province, town, or neighbourhood can significantly impact the actual asking price. Two identical houses or apartments located just a couple of streets apart can have vastly different market values.
Furthermore, the price growth varies depending on whether the property is newly built or second-hand, encompassing any home that has been previously occupied, regardless of its recent construction. The latest data reveals substantial disparities in the price increases of second-hand homes between different provinces, with some experiencing up to 25 percentage points higher growth than others.
Unsurprisingly, provinces with popular beach holiday destinations have witnessed the highest increases in residential property values. Apart from the well-known coastal regions of the Canaries and Balearics, the provinces of Alicante and Málaga, home to the Costa Blanca and Costa del Sol respectively, have experienced significant climbs in home prices over the past year.
However, it is not solely limited to the coastal areas and islands. Alicante and Málaga are in direct competition with Navarra, a land-locked province in the north close to the Pyrénées and the Basque Country, with Pamplona as its capital. These three mainland provinces have all exceeded the national average in terms of home value increases but fall below the substantial growth observed in the island regions. Their respective prices rose by approximately 15% based on April 2022 figures.
While the overall surge in residential property prices in Spain is notable, buyers should consider the specific dynamics of each region and property type when evaluating market values. The local market conditions, demand, and location factors play a crucial role in determining the actual asking prices for homes across the country.