Between April and June 2023, house prices rose by 3% compared to the previous quarter and by 1.1% compared to the same period last year, according to Solvia's II Solvia Market View 2023 study.
The real estate services firm for individuals explained that after several months of slowing rises, house prices continued to go up in the second quarter of the year, although transactions recorded a further decline.
Specifically, from April to June, 151,983 sales were recorded, representing a 5.6% drop compared with the previous quarter, while, compared with the same period in 2022, the volume of transactions fell by 7.3%.
New housing sales increased by 3.1% compared with the same period of the previous year, in contrast to second-hand sales, which fell by 9.4%.
The firm explains that despite the drop in transactions, they remained at high levels, which has been contributed to by foreign homebuyers. Specifically, in the second quarter, almost 15% of transactions were carried out by this group, which is close to record levels.
"As Solvia has already stated, the current year will be one of 'stabilisation' for the real estate sector. Factors such as price increases or the rising cost of money have their logical consequence on the number of transactions recorded," says Solvia's Business Director, Ernesto Ferrer-Bonsoms.
"However, activity levels remain high, above the figures reached in the years before the pandemic. In this sense, we forecast that the current year will close slightly below 600,000 transactions, compared to more than 640,000 in 2022," concludes Ferrer-Bonsoms.
Solvia also expects residential property prices to consolidate their growth, and according to its forecasts, the year will end with an increase of between 1.5% and 2.5% year-on-year.
Navarre, the region with the highest growth; La Rioja, the region with the biggest decline
The real estate firm stated that although growth is generalised at the end of the first half of the year, some autonomous communities have shown decreases.
The Foral Community of Navarre and the Principality of Asturias saw the highest price increases, with rates of almost 24% and 11%, respectively. In contrast, the only regions where decreases were recorded were La Rioja, Cantabria and the Basque Country.
At the provincial level, 26 territories recorded prices above €800 per square metre, but did not reach €1,500 per square metre. Likewise, Guipuzcoa, Madrid and the Balearic Islands saw the highest prices, above €3,200 per square metre, while Ciudad Real and Cuenca did not reach €700 per square metre.
Madrid overtakes Barcelona as Spain's second most expensive city
Madrid confirmed the trend it had been hinting towards in the second quarter and overtook Barcelona as the second most expensive city in the country, behind only San Sebastian. The average house price in Madrid stood at €3,645 per square metre, compared to €3,619 in Barcelona.
Prices increased by 4.6% in Madrid and 1.5% in Barcelona compared to the same quarter of 2022, while the rises compared to the first three months of 2023 were 2.2% and 1.1%, respectively.
Mortgage lending falls by almost 15%
In the second quarter, the number of mortgages on homes registered stood at 93,557, a fall of almost 15% compared to January to March and just over 21% compared to the same period last year, "highlighting the impact that the increase in interest rates is having on the property market".
"The increase in financing costs is making access to property ownership more difficult, leaving certain potential buyers unable to afford this increase out of the market," says Ferrer-Bonsoms.
Likewise, the average monthly mortgage payment stood at around €704 between April and June, 3% more than in the first quarter of the year and almost 11% higher than in the same period of 2022.
Concerning mortgage types, fixed-rate mortgages accounted for around 63% of new mortgage loans in the quarter, compared with just over 37% for variable-rate mortgages indexed to the Euribor.
Rent at around €12 per square metre
Finally, the study points out that rental prices continued to rise in the second quarter to €11.9 per square metre, an increase of 2.6% compared to the previous three months and 5.3% compared to the period between April and June 2022.
The Balearic Islands was the most expensive province for renting between April and June, at €16.5 per square metre per month, while Barcelona – at €16.2 per square metre per month – became the second most expensive area, followed by Madrid (€15.5).
By contrast, the cheapest rent in Spain was recorded in Ciudad Real, Jaen, Caceres, Lugo and Zamora, where it did not reach €6 per square metre per month.
"Rental prices are expected to continue rising for the rest of 2023, affected by a scarce supply that has no prospect of growing in the short term, as well as by a strong demand for rental housing, fuelled by the shift of potential buyers towards renting due to the rise in mortgage rates, which makes it difficult to buy a property," concludes Solvia.