Recent housing market data by Eurostat tells us that housing prices in the European Union (EU) increased faster than rent. From 2010 to the third quarter of 2021, rent increased by 16% and housing costs by 39%. But Spain showed almost unchanged prices. In this decade, housing prices fell by 0.5% and rent increased by 5%.
Eurostat also showed that housing prices in the EU rose by 9.1% year-on-year only in the third quarter of 2021. This is the highest growth since the second quarter of 2007. The agency’s in-depth historical analysis tells us that the 2008 economic crisis burst the housing bubble and dropped real estate prices in many European countries. This continued until about 2013. Each country dealt with the crisis differently.
How’s the situation now and how have housing prices changed in Spain? Let's look at some data from 2021/
Content:
- Spain is returning to the prices of a decade ago
- Housing prices in Spain: data on autonomous communities
- Housing prices in Spain: the best capitals
- Conclusion
Spain is returning to the prices of a decade ago
Real estate prices since 2010 show that housing costs increased in 23 EU countries and decreased in 4, one being Spain.
In 11 years, prices have more than doubled in some countries. These are Estonia (141%), Hungary (118%), Luxembourg (117%), Latvia (106%), and Austria (104%). In the Czech Republic and Lithuania, this is close to 100%. It exceeds 80%. in Germany and Sweden. It’s above 50% in Slovakia, Portugal, Denmark, the Netherlands, and Malta. Drops can be seen in Greece (-28%), Italy (-12%), Cyprus (-6%), and Spain (-0.5%).
Looking at the difference between housing costs and rent, housing prices on average increased more than rental prices. Rent rose more than the cost of buying a home in 18 EU countries including Spain.
How have housing prices changed in Spain? Let's take a closer look at the country.
Housing prices in Spain: data on autonomous communities
Housing prices in Andalusia
Since reaching highs in 2007 of €1.957 per m2, the apartment costs increased by 36.5%. The lowest was in the first quarter of 2001 at €721 per m2.
But in 2021, the housing market was positive. The average housing price in Andalusia in the fourth quarter increased by 10.6% year-on-year at €1,243 per m2.
Housing prices in Catalonia
The average value in Catalonia reached a high in the second quarter of 2007. Since then, housing prices in Catalonia have dropped by 34.7% until 2020.
2020s fourth quarter dropped by 5.5% compared to 2019. After the pandemic, the cost of housing in Catalonia in 2021s fourth quarter was €1,913 per m2, an increase of 4.4% year on year.
It’s is helpful to use a Spanish index that uses the prices from 2001 as 1,000 points. According to this, housing prices in Catalonia in the fourth quarter of 2021 reached 1,651 points. We can see that the average housing cost here increased 1.65 times over the past 20 years.
Housing prices in Madrid
In the third quarter of 2007, housing prices in Madrid’s provinces reached a historic high. The price decreased by 23.7% until 2020.
Everything changed after the pandemic. The average housing price in Madrid in 2021’s fourth quarter was €2,426 per m2, an increase of 11.3% over the year. But 2020 showed a drop of 8.2%. Average prices have increased 1.75 times from 2001 to the fourth quarter of 2021.
Today, it takes less than a month on average for a seller to find a buyer. This is better than the average for Spain.
Housing prices in Valencia
In Valencia, housing prices peaked in the third quarter of 2007 at €1,891 per m2. The lowest was in the first quarter of 2001 at €679 per m2. From the peaks in 2007 until 2020, the value of apartments dropped by 42.2%.
In the fourth quarter of 2021, housing prices in the area rose to €1,093 per m2. This average was 6.4% higher than the last quarter of 2020.
Housing prices in the Balearic Islands
According to the index of 1000 points in 2001, housing prices in the Balearic Islands in the fourth quarter of 2021 were 2,105. The average in the region increased 2.1 times since 2001.
The Tinsa IMIE local market index shows that over the past year, housing prices in the Balearic Islands increased by 12.2%. In 2020, prices in the region dropped by 1.4% compared to 2019. In 2021, things looked positive with an average price of €2,504 per m2 in the last quarter. This is a drop of 8.2% compared to the historical peak.
Housing prices in Spain: the best capitals
Housing costs in A Coruña
Compared to 2001, the average housing price in A Coruña in the second quarter of 2021 increased by 1,456 times. The cost of housing fell by 2.1% from 2019-2020.
But in 2021, housing costs rose by 6%, averaging €1,676 per m2 compared to 2020. This is a total drop of 24.7% from the city’s historical peak.
Housing costs in Albacete
Tinsa shows that the average price in Albacete in 2021’s second quarter was 1,456 points.
In the fourth quarter, housing prices increased by 9.3% compared to 2020. The average housing price in the region was €1,079 per m2. This figure is a total drop of 49.1% compared to the historical peak.
Prices dropped 11.5% in 2020 compared to the fourth quarter of 2019.
Housing costs in San Sebastian
Housing prices rose by 17.4% in San Sebastian in 2021 and the average was €4,088 per m2. This shows a 9% decline compared to the city’s historical high.
San Sebastian was one of the few cities where housing prices increased in 2020, albeit by 0.4% in 2019.
From 2001 to 2021, the average cost of housing in San Sebastian rose by 1,456 points.
Housing costs in Malaga
The average housing price at the beginning of 2022 is €1,830 per m2. This shows a gradual decrease of 24.2% compared to Malaga’s historical peak.
In the fourth quarter of 2020 compared to 2019, prices decreased by 9.6%. 2021 was positive and the average cost in the fourth quarter was 14.9% higher than in the same period of 2019
The average price in Malaga in the second quarter of 2021 was 1,456 points compared to 1,000 points in 2001’s historical peak.
Conclusion
We felt the effects of the pandemic and restrictions but market indicators show that the Spanish real estate sector is recovering well. In 2021, investors were once again excited and their pent-up demand lifted the market. It seems likely that housing prices will continue rising. Take advantage of this in 2022 and successfully invest in Spanish housing.