Many investors are interested in the correct and profitable investment in Spanish real estate. After analyzing the housing market, it is necessary to answer these questions: which regions are more profitable to invest in? When it is better to make a deal? What prices can I expect? What forecasts have experts made? We will answer these questions in our article.
Content:
- Monthly and annual price changes in autonomous communities
- Housing prices in autonomous communities
- Changes in housing prices by province
- Demand growth and pre-pandemic indicators
- Will prices rise or fall in autumn?
- Is it profitable to buy a home in autumn?
- We will help you choose and buy real estate in Spain
Monthly and annual price changes in autonomous communities
In Spain, 13 autonomous communities have positive monthly data in August 2021. The increase was recorded in the following regions: Aragon (2.3%), Castile-La Mancha (1.5%), Andalusia (1.0%), Asturias (0.9%), Catalonia (0.8%), La Rioja (0.5%), Canary Islands (0.5%), Basque Country (0.5%), Castile and Leon (0.3%), Madrid (0.2%), Murcia (0.2%), Valencia (0.2%), and Cantabria (0.1%).
On the other hand, communities with falling prices are Extremadura (-1.0%), Navarre (-0.5%), Balearic Islands (-0.1%), and Galicia (-0.03%).
Housing prices in autonomous communities
The most secondary housing in Spain is in Madrid and the Basque Country with prices of 3.117 euro/m2 and 2.883 euro/m2, respectively. The rest are listed below:
| Autonomous community | Price,€ |
|---|---|
| Andalusia | 1.683 € |
| Aragon | 1.589 € |
| Asturias | 1.584 € |
| Balearic Islands | 2.846 € |
| Valencian Community | 1.425 € |
| Galicia | 1.613 € |
| Canary Islands | 1.781 € |
| Cantabria | 1.744 € |
| Castile and Leon | 1.440 € |
| Castile-La Mancha | 1.124 € |
| Catalonia | 2.543 € |
| La Rioja | 1.440 € |
| Madrid | 3.117 € |
| Murcia | 1.125 € |
| Navarre | 1.618 € |
| Basque Country | 2.883 € |
| Extremadura | 1.148 € |
Changes in housing prices by province
In 64% of the 50 provinces analyzed, the price rose in August 2021. The top 10 provinces with an increase were Toledo (4.0%), Huesca (3.1%), Malaga (2.3%), Zaragoza (1.9%), Ciudad Real (1.8%), Gipuzkoa (1.7%), Girona (1.6%), Valladolid (1.6%), Santa Cruz de Tenerife (1.4%), and Tarragona (1.3%).
On the other hand, decreases were recorded in the following provinces: Badajoz (-1.4%), La Coruna (-0.8%), Araba Alava (-0.8%), Lleida (-0.6%), Las Palmas (-0.5%), Cadiz (-0.5%), Navarre (-0.5%), Guadalajara (-0.3%), Cuenca (-0.3%), and Caceres (-0.3%).
Housing prices by province
Gipuzkoa is the most expensive province with 3.196 euro/m2, followed by Madrid (3.117 euro/m2), Barcelona (2.977 euro/m2), and others.
On the other hand, provinces with a price per square meter below 1,000 euro are Ciudad Real with 980 euro/m2 and Avila with 994 euro/m2.
| Province | August 2021 (euro/m²) |
|---|---|
| Avila | 994 € |
| Alicante | 1.529 € |
| Albacete | 1.313 € |
| Almeria | 1.188 € |
| Asturias | 1.584 € |
| Balearic Islands | 2.846 € |
| Barcelona | 2.977 € |
| Bizkaia | 2.847 |
| Burgos | 1.436 € |
| Valladolid | 1.575 € |
| Gipuzkoa | 3.196 € |
| Granada | 1.555 € |
| Girona | 2.096 € |
| Cantabria | 1.744 € |
| Castellon | 1.105 € |
| Cordoba | 1.374 € |
| La Rioja | 1.440 € |
| Leon | 1.250 € |
| Lugo | 1.162 € |
| Madrid | 3.117 € |
| Malaga | 2.391 € |
| Murcia | 1.125 € |
| Palencia | 1.443 € |
| Pontevedra | 1.828 € |
| Salamanca | 1.693 € |
| Zamora | 1.227 € |
| Santa Cruz de Tenerife | 1.813 € |
| Zaragoza | 1.661 € |
| Segovia | 1.348 |
| Ciudad Real | 980 € |
| Tarragona | 1.512 € |
| Toledo | 1.013 € |
| Orense | 1.456 € |
| Huelva | 1.279 € |
| Huesca | 1.403 € |
| Jaen | 1.034 € |
Thus, the Spanish housing market is optimistic based on the data indicating an increase in sales in recent months. But what will happen after summer? Will it be a good season? Experts provided forecasts regarding the pandemic.
Demand growth and pre-pandemic indicators
Experts agree that by this autumn, there will be an increase in real estate purchases and sales indicating a positive outlook. Juan José Aguilera, Director of Institutional Relations at COAPI in Barcelona, states: "If this trend continues, we expect autumn with a sales rate of over 125,000, which is almost pre-pandemic. In any case, this trend will be confirmed or not, depending on the health and economic situation in the country, unemployment rates, the next generation of European funds, etc."
The closure of operations has improved quarterly since the beginning of the pandemic. José Manuel Fernández, Deputy General Director of UCI (Real Estate Loans Union), notes, based on the data of the "VIII Real Estate Barometer" (market sentiment of real estate specialists UCI and SIRAI), that if in July 2020 the closing of trading was -4% compared to the previous quarter, in July this year it has increased by 2% compared to the same period and "professionals are confident that the trend of moderate growth will continue."
The luxury property sector will also develop. According to Eduardo Crisenti, Managing Partner of Barnes Madrid, "we have high demand indicators especially for the luxury property sector, both for rent and sale, and high demand for an investor profile which boosts the market."
According to Vicens Ramón, Managing Director of RTV Group Real Estate, the reasons for the increase in demand for the sale and purchase of housing in the autumn of 2021 are related to a general revaluation of the entire sector and improvement of the multi-family segment (both in buying and renting).
He also adds to the reasons, the expansion of BTR (buy-to-rent), the restoration of free movement between countries, the return of international investors, low financing, and overall real estate recovery.
José Manuel Fernández also states that the labor market is improving thanks to a recovery in many sectors.
Will prices rise or fall in autumn?
Market behavior is driven by prices. But it depends on each zone. Juan José Aguilera notes: "We cannot talk about a widespread trend - it goes through the zones as a whole and depending on the development of the health situation and the economic context, prices will rise slightly with a mild trend to stabilize."
Vicence Ramón talks about price increases and significant growth will be in major cities (Madrid, Barcelona) as well as in the Balearic Islands and the Mediterranean coast. This situation is caused by foreign and national investors with high purchasing power who consider housing a valuable asset.
"An example is a year-on-year increase that was in the Balearic Islands in the first half of 2021 compared to 2020 by 8.2% and almost 6% in Catalonia," says Ramon.
The expert notes that COVID-19 forces people to move from the center to the periphery of cities to search for open spaces and better quality of life with remote work.
The Union of Real Estate Lenders believes that increased transactions bring stability and price increases: "This is different from the picture of March 2020 as sales fell by 37.5% according to INE data and the number of transactions decreased by over 100,000 compared to the previous year."
Is it profitable to buy a house in autumn?
In general, experts believe that autumn is a good time to buy and sell housing. Vicens Ramón believes that some buyers can benefit from the favorable financing conditions for their first residence (both at a fixed and variable rate). Many people can improve or replace their ordinary housing by moving from small flats in the city center to new, more stable, larger ones with common areas in residential complexes in large cities.
The leaders of COAPI Barcelona explain that autumn is a period of transformation, the implementation of new projects, and preparation for the future, "and in this context, autumn 2021 will provide great opportunities for buying housing at attractive prices in some areas and with good prospects for revaluation in others."
UCI Deputy Director-General José Manuel Fernández states that "the savings capacity created over the past year, improved labor market, and government assistance in housing rehabilitation to improve energy efficiency are factors that will stimulate buying a property during this period."
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