The unbridled growth of inflation, the international crisis related to the conflict in Ukraine, the increase in interest rates by the ECB — this and much more portend major problems for the economy of the whole of Europe. Spain, which is already suffering from systemic unemployment, falling average incomes and a number of other problems, may find itself in a rather difficult situation.
The real estate market, in particular the pace of new construction, is a good indicator of the strength or weakness of a particular country's economy. In the case of Spain, this is a good indicator of the strength of the country as a whole and its regions in particular. Looking at the local Spanish real estate markets, you can easily notice the unevenness of their development, where some autonomous communities and provinces show significantly better results than others.
Below will be presented the regions of the country where the indicators of new construction are high and the market feels in a good mood. These areas will show good economic results by the end of 2022 and probably in 2023.
According to available data, the Spanish capital, Madrid, is in the first place in terms of construction rates. In 2022, a total of 4,580 residential real estate units were put into construction. The districts of Madrid with the largest number of new buildings are: Hortaleza, Vicalvaro, Tetuan, Arganzuela and Barajas.
Currently, the average price of a new building in Madrid is 5,100 euros per sq.m — an increase of 3.4% in annual terms. However, during the quarter the price fell by 2.6%. Salamanca and Retiro became the areas with the most active growth in prices for new residential properties. They have reached an average price of 10,000 euros per sq.m. At the opposite end of the spectrum are Villaverde and La Latina with an average of 1,960 and 2,800 euros per sq.m. respectively.
Malaga, the capital of the autonomous community of Andalusia, is in second place. This year, the construction of 1,610 new houses was started in the region. The region has become increasingly popular in recent years with tourists and mass buyers due to a number of factors at once: a favorable climate, a growing economy and political stability.
In the province of the same name, the capital of which is Malaga, there are such large complexes as «Hacienda Cabello» and «Martiricos». The price level for new buildings in the region put up for sale reaches 3,300 euros per sq.m. — this is 660 euros more than the average in Spain.
In third place is Valencia, the center of the autonomous community of the same name. In 2022, about 1,400 new houses were under construction. It should be noted that in recent years, there has been a positive growth trend in the residential real estate market of Valencia as a whole. Prices for new construction have reached a record high — the average is at 2,950 euros per sq.m.
The most expensive areas of Valencia turned out to be Eixample and Suitat Vella, the prices in which are 3,300 and 3,100 euros per sq.m. respectively. On the opposite side of the spectrum are the districts of Poblados de Oeste (Poblados del Oeste) and Poblados de Norte (Poblados del Norte). In both cases, prices dropped below 1,470 euros per sq.m.
There are several other cities from the autonomous community of Madrid in the top ten of this rating, which indicates the real economic power of the region. An example is the city of Valdemoro, where the construction of 1,360 housing units was started.
Prices for new buildings in Valdemoro are also at a record high — about 2,030 euros per sq.m., which represents an increase of 6.5% year-on-year and an increase of 0.4% by the second quarter of 2022. The pace of housing construction in the city is also noticeably higher than the national average.