Galicians have to tighten their belts tighter when it comes to buying housing in the region. The situation in the residential market of Galicia is one of the most difficult in the country. The price growth in the region in the first quarter of 2023 remained several tenths of a percent higher than the average growth in the country. The average figure is 6.3% growth in annual terms.
The problem of rising prices is much more serious in such regions as Cantabria (12.1%), Aragon (10%), La Rioja (8%) and Extremadura (7.5%). The situation is healthier in the Canary Islands and Catalonia, which showed a 3.9% and 4.4% increase in prices in annual terms, respectively. Galicia also took seventh place in the top ten most expensive residential real estate markets in Spain.
Prices are getting closer and closer to the peaks of the boom times in the market in the second half of the 00s, which ended with the global economic crisis at the end of the decade. Galicia remains to grow by 19.3% to overcome historical highs and this prospect is not so far from realization. The average price growth in Spain should grow a little more, by 20.8%.
Provinces and capitals
Of the four provinces of Galicia, La Coruna showed the largest increase in housing prices in the first quarter of 2023 (7.4% year-on-year). It is followed by Ourense (7.2%), Pontevedra (6.4%) and Lugo (2.8%).
At the country level, Madrid and Barcelona, along with the capitals of the same name, remain the most expensive regions. You can also note Salamanca, where the price per square meter of housing has increased to almost 5,500 euros. Sarria is also a curious case with 4,800 euros per square meter on average.
So far, this, of course, does not go to any comparison with Galicia, where prices have not overcome even 1,400 euros per square meter in average terms. Except that some areas of Pontevedra were able to show prices above 1,450 euros.
The valuation company Tinsa notes that the year for the Spanish housing market began with a general slowdown in the growth of prices in the secondary market with a gradual acceleration of sales and price growth by the end of the first quarter. Now the market is again experiencing a large stabilization of growth at the beginning of the second quarter. It is unknown whether the market will break the forecasts once again, but even with a sudden strong growth, the pace of the first half of 2022 will not be achieved. The market situation is fundamentally different than at the end of the pandemic.
In addition to the economic uncertainty of recent months, according to Tinsa, problems have recently arisen in some banks in the United States and, to a lesser extent, in Europe, which opens up the possibility of more restrictions on lending by financial institutions and this will also play a huge role in slowing down the market.