The Balearic Islands have completed 2022 as the region with the highest land prices in the urban area. A square meter of land here cost 341 euros at the end of the year, which was the result of a 10.5% increase in price during the previous 12 months.
At the same time, the land market in the urban area, on average in Spain, ended last year on a downward trajectory. According to the data of the Ministry of Transport, Mobility and Urban Development of Spain (MITMA), the drop in sales was about 26%, the area of the territory transferred by buyers decreased by more than 30%, and its cost was 22% lower than a year earlier.
The end of 2022 was marked by the first drop in prices for urban land in the 6th quarter, however, the drop was only 0.1%. The average cost per square meter in the country has dropped to 160 euros. Inflation and rising interest rates, superimposed on the slowdown in the real estate sector and a number of economic deficits, played a role. However, in quarterly terms, the end of last year increased by 6.5% in prices compared to the results of the third quarter.
With a noticeable lag behind the Balearic Islands, the autonomous community of Madrid, the Canary Islands and Baskonia follow. A square meter of urban land in Madrid cost 261 euros, fell in price by 15.5% over the year from the end of 2021. In the Canary Islands, the price increased by 10.5% over the same period and reached 240.5 euros per square meter. Baskonia stopped at 232.5 euros per square meter.
The last historical maximum of land prices in the city was set in mid-2007, just at the peak of the boom in real estate prices. Then a square meter of land area cost about 285 euros.
Sales fell by 26%
As mentioned earlier, at the end of 2022, sales of urban land fell by 26.2%, to 5,685 transactions per year. This is the lowest figure since mid-2020. The largest drop in sales was recorded in Castilla-La Mancha - 40%. Sales fell by more than 30% in Madrid (-39.6%), Extremadura (-36.9%), Cantabria (-32.8%), Aragon (-32.6%), the Balearic Islands (-30.3%) and La Rioja (-30%).
It is worth noting that if the peak of prices was recorded in 2007 and the figures of the last year are only half as low as historical ones, the maximum of sales was recorded by MITMA in 2004. At that time, 23,500 sales transactions were made, which is more than four times more than last year's totals.
In total, over the past year, 964 million euros were earned from sales, which is also a drop in annual terms by 22%. However, the growth from Q3 to Q4 2022 was 1.4%. As part of these transactions, 6.5 million square meters of land were transferred to the new owners, 31.4% less than in 2021. The peak year in terms of area was 2005, when more than 33.5 million square meters were sold on the market.