Spanish house prices increased 3.6% during the year to January 2018 (3% inflation-adjusted) to €1,410 per square metre m2, a sharp improvement from a meager growth of 0.96% (-1.92% inflation-adjusted) during the same period last year, according to TINSA.
Only a few short years ago the above headlines would seem absurd, the Spanish market was had no positives or so we were told. The brave few that held or bought in these days are now reaping the benefits!
Continued growth and economic sentiment indicators suggest that Spain has turned a corner in the property cycle, with an appetite for medium to large scale investment set to continue driving demand. According to forecasts, the economy will continue to expand between 2017 and 2019.
The whole Spanish property sector (domestic and commercial) has experienced positive growth with a major shift away from bank financing and towards alternative sources of financing.
Land is now in demand with prices per m2 above pre 2010 figures, serviced developments has surged as they can now offer investors limited risk exposure. Demand for luxury villas, apartments and new style luxury new build project in certain areas is climbing considerably.
At the national level, prices are not expected to rise given the vast quantity of supply. In the major cities, such as Madrid and Barcelona, there is no longer any quality supply to the market, a situation which could cause prices to spike in specific areas.
The market is expected to continue with demand now outstripping supply but it is the higher luxury market that seems more stable.