Alex Trelinski
HOUSE prices in Spain leapt to their biggest rise last year since the property boom era of 2007.
The National Institute of Statistics (INE) said on Friday that 2024 saw an average rise of 8.4%- double the previous year.
It means that property prices have now grown for 11 consecutive years.
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Costs of new builds rose even higher by 10.9% and compared to a decade ago, they are 85% more expensive with no sign of the trend changing.
The 2024 price hikes are down to not enough homes being available to buy coupled with lower mortgage rates.
Maria Matos, Director of Studies at property portal Fotocasa said: “We are a point where demand has never been so far from supply.”
“There is also a social transformation towards more single-person households, along with the European Central Bank cutting interest rates, meaning that mortgages are more attractive,” Matos added.
As for the bigger rise in new build prices, Matos commented: “Developers continue to have problems in setting up projects due to a lack of land, construction costs and bureaucracy, which stops supply rising at what is needed.”
All of Spain’s regions saw price increases, with the largest in Navarre and Andalusia, with hikes of 10.4%, followed by Aragon (10.2%) and La Rioja (9.2%).
In contrast, the Balearic Islands had one of the most moderate increases (6.6%), suggesting that some areas-, particularly those more dependent on tourism- and with a saturated market, are experiencing a relative slowdown.
Miguel Cardoso, chief economist at BBVA Research, said that ‘in some areas where housing almost unaffordable, demand is falling.”
“This applies to the Balearics where prices have gone up so much, that it is difficult for them to be sustained because many buyers cannot or will not pay more.”
