House prices continue to rise after the 7.2% increase recorded in August, reaching a national average of €2,004/m2. It is still 5.3% below the historical maximum house prices in Spain.
Meanwhile, the average rental price has reached €12/m2 per month for the first time in Spain, the highest ever in the historical series published monthly by idealista, following a year-on-year increase of 9.5% in August. Up to five Spanish capitals now share maximum for sale and rental prices. They are San Sebastian, Madrid, Malaga, Palma and Santa Cruz de Tenerife.
In fact, 25 provincial capitals have hit the ceiling in rental prices during August, while in the sales market, there are 'only' eight capitals at maximums, of which these five cities coincide.
August 2023 | Evolution of the average price of second hand houses for sale in Spain and capital at maximum
San Sebastian has the highest average property price in this 'top 5' with €5,326/m2, ahead of Madrid (€4,015/m2) and Palma (€3,863/m2). Behind are Malaga (€2,594/m2) and Santa Cruz de Tenerife ( €1,888/m2).
However, Santa Cruz has experienced the highest increase over the last year, with a rise of 17.7%, ahead of the 13.7% in Malaga or the 13.2% in Palma.
San Sebastian (3.6%) and Madrid (3.1%) recorded less dramatic rises, but they have been accumulating increases since the end of the pandemic and the economic crisis.
In 2018, the Spanish capital broke the price barrier marked by the previous real estate boom. The growth continued until the pandemic broke out. After the worst of the confinement, at the end of 2020, prices moderated a little, but since mid-2021, housing prices for sale in the capital have not stopped rising and, since last June, have already exceeded €4,000/m2.
Shortage of supply pushes up rental prices
On the rental side, Madrid is already above San Sebastian with a monthly rent of €17.4/m2, only topped by Barcelona's €19.4/m2. The Catalan capital has set a new high for rental prices, but not for sale prices, where its values are still 3.9% below the maximum price reached in 2007 (€4,310/m2).
Behind Madrid, San Sebastian stands at €17/m2 in August, ahead of Palma (€14.7/m2), Malaga (€12.8/m2) and Santa Cruz de Tenerife (€10.5/m2) among these five capitals that share maximums in both sales and rentals.
The Andalusian capital and the Balearic Islands stand out for their year-on-year increases – above 20% – and only behind the increases recorded in Valencia and Alicante, which also set new rental highs but not sales prices.
The increases in San Sebastian (11.4%) and Madrid (10.9%) have also been notable over the last year. Up to 14 capitals have seen double-digit rises in rental prices during August.
A few days ago, idealista's spokesperson, Francisco Iñareta, was quoted by El País as saying that "the main problem in the rental market is the lack of available supply. The supply is not recovering and continues to be insufficient for the demand, and as long as these tensions do not disappear, we will continue to see prices rising".
"For the ninth month, prices are at record highs in Spain, as well as in most provincial capitals. Serious policies are needed to get more and more homes on the market, as was seen during 2020, when the huge growth in available supply led to double-digit falls in rental prices across Spain. To do this, it is important to rebalance the relationship between tenants and landlords, as the latter, far from being the problem, are the most important part of the solution," concluded the idealista spokesperson.