New housing prices rising
Contents
Used housing prices rose 3.3% in the second quarter year-on-year — 2.4% more than in the previous quarter, and this is the highest figure since the fourth quarter of 2019, before the pandemic began.
This is evidenced by the Housing Price Index (HPI) of the National Institute of Statistics (INE), published on September 8, 2021. With the growth in the second quarter, used housing prices have been rising for 29 consecutive quarters in annual terms, and this breaks the slowdown trend that began in the first quarter of 2020 with the start of the pandemic crisis.
In the first quarter of 2020, used housing prices rose 3.2% year-on-year, and then growth rates declined in subsequent quarters until the first quarter of 2021 when the increase was 0.9% — the minimum annual growth in seven years.
New housing drives price growth
By housing type, used property prices rose 2.9% year-on-year in the second quarter of this year — more than two percentage points above the previous quarter’s figure (0.7%) and the maximum since the end of 2019.
As for new construction, their prices soared 6% year-on-year in the second quarter — almost four percentage points more than in the previous quarter, and this is the highest figure since the fourth quarter of 2020 (8.2%).
Where are prices rising the most?
The annual HPI indicator in the second quarter of 2021 grew in all autonomous communities. The highest growth was recorded in the Canary Islands (6.4%), Balearic Islands (5.7%), Cantabria (5.3%), Murcia (4.4%) and the Valencian Community (4.3%).
Above the national average (3.3%) were also Andalusia (3.6%), Asturias (3.6%) and Galicia (3.5%).
The minimum growth was noted in Extremadura (1.7%), Madrid (1.9%), La Rioja (2.3%), Castilla-La Mancha (2.4%) and Aragon (2.5%).
In the remaining autonomous communities, HPI was also below average: Catalonia (3.2%), Navarra (2.6%), Basque Country (2.6%) and Castile and León (2.6%).
| Autonomous Community | Annual Housing Price Change (%) |
|---|---|
| Canary Islands | 6.40% |
| Balearic Islands | 5.70% |
| Cantabria | 5.30% |
| Murcia | 4.40% |
| Valencian Community | 4.30% |
| Andalusia | 3.60% |
| Asturias | 3.60% |
| Galicia | 3.50% |
| Catalonia | 3.20% |
| Navarra | 2.60% |
| Basque Country | 2.60% |
| Castile and León | 2.60% |
| Aragon | 2.50% |
| Castilla-La Mancha | 2.40% |
| La Rioja | 2.30% |
| Madrid | 1.90% |
| Extremadura | 1.70% |
What is the dynamics compared to the beginning of the year?
If we analyze the latest dynamics of the Spanish real estate market, it is clear that the upward trend continues.
Thus, in quarterly terms (second quarter to first), housing prices rose 2.4% from April to June — the maximum quarterly growth in three years, specifically since the second quarter of 2018, when prices rose 2.6%.
However, by housing type, the picture differs: new construction prices grew 1.3% between the first and second quarters of this year, while used housing became more expensive by 2.7% — the maximum quarterly growth in six years, since the second quarter of 2015. In other words, housing price growth is more driven by the secondary market rather than new construction.