The Mediterranean coast of Spain and large cities have experienced the biggest price hike. As Spain’s economy continues to recover and the rate of inflation breaks all historical records, house prices have followed suit, with the average value of new and resale properties increasing by 1.2% in November, and 9.5% year-on-year, according to the figures published by appraisal firm Tinsa.
The director of the company has indicated that the exponential increase is down to a simple case of supply and demand, with the scarcity of residential properties across Spain pushing the prices up. The Mediterranean coast reported the highest price hike (+13.4%), followed by large cities (+10.9%), compared to the same period last year, at the height of the pandemic.
Overall, the average of new builds and resale homes has increased by 28.2% from the lowest value recorded by the general index following the financial crisis in February 2015. Specifically, cities and islands have experienced an upturn of 36.5% and 35.6% since that time.
Tinsa has also pointed out that low interest rates coupled with a supply shortage has made the real estate market an attractive proposition for investors in Spain, who for the moment don’t appear to be overly concerned about the rise in inflation. From the point of view of credit, the relationship between mortgages and sales has remained relatively stable, and the criteria of financial institutions hasn’t altered in recent months.
Source: Spain News Today, December 2021