Housing prices in Spain have risen by over 3% this summer and are expected to increase further in the coming months, according to the latest reports from Sociedad de Tasación and Tinsa, two key players in the appraisal sector.
Both companies indicate that average prices for new and used housing have continued to climb in Q3, with predictions of further upward pressure.
For instance, Sociedad de Tasación (ST) reports that the average price per square metre at the end of September stood at €1,903, up from €1,887 in June. This reflects a positive annual variation of 3.6% and a half-yearly increase of 1.9%. This upward trend is expected to persist until year-end, potentially raising the average price to €1,918 per m².
Tinsa also reports a rise of over 3% in the average price of new and used housing in the third quarter, reaching €1,804/m². This reflects a quarterly increase of 1.3% and a year-on-year rise of 3.1%. The company notes that this growth rate is "in line with inflation" and indicates "a certain dynamism" in prices compared to the stabilisation observed in previous quarters.
“Robust residential demand, coupled with limited short-term supply, keeps average prices under pressure, particularly in job centres and tourist areas. Here, comparing average income levels can reveal accessibility issues. While the gradual decrease in mortgage costs and the restoration of household purchasing power post-inflation are reducing purchasing efforts, the ongoing supply shortage in these areas will take time to resolve. As demand continues to rise, residential prices are tightening,” explains Cristina Arias, Director of Tinsa by Accumin Research Department.
General price increases, according to ST
The ST report indicates a year-on-year increase in the price of new and used housing across all regions, with rises ranging from 1.4% in Extremadura to 6.4% in the Balearic Islands.
In absolute terms, the Community of Madrid once again recorded the highest unit price, surpassing the €3,000 per m² threshold for the first time since June 2009, reaching €3,030.
This quarter, the Balearic Islands (€2,646) surpassed Catalonia (€2,609), which has historically held the second-highest average price in Spain. Conversely, Extremadura has the lowest unit price at €958, remaining the only autonomous region that does not exceed the €1,000 per m² mark.
By province, the trend of rising house prices is also widespread. The five provinces with the highest increases were Málaga and the Balearic Islands (+6.4% each), followed by Tenerife (+5.9%), Valencia (+5.7%), and Cádiz (+5%). In contrast, Soria was the only province to register a slight decline, with a year-on-year decrease of -0.2%.
In absolute terms, Madrid (€3,030) recorded the highest average price nationally, surpassing Barcelona (€2,950) and Guipúzcoa (€2,882). On the lower end, Ciudad Real (€923) and both Cáceres and Badajoz (€958 each) reported the lowest prices.
Additionally, the appraiser noted a year-on-year increase in construction costs, which rose by 1.9% over the past year, reaching €1,275 per m² at the end of the third quarter. However, this figure represents a decline of 2.7% compared to the previous quarter.
According to the report, the Real Estate Confidence Index continues its upward trend that began in the first quarter of the year, reaching 53.1 points out of 100 by the end of the third quarter of 2024. This marks the second consecutive quarter above the break-even point of 50, reflecting a quarterly increase of 2.2% and a 13.2% rise over the past 12 months. All autonomous communities showed improvements in their confidence indices year-on-year, with increases ranging from 4.5% in the Balearic Islands to 20.6% in Asturias. In absolute terms, Asturias has the highest level of optimism at 57.5 points, while Extremadura has the lowest at 47.3.
Finally, the report reveals that the Real Estate Effort Index, which measures the number of years of full salary required to purchase a medium-sized home, stood at 7.4 years at the end of the third quarter. This reflects a 2.6% decrease year-on-year and a 0.5% decline quarter-on-quarter. Generally, the gap varies from 4.9 years of salary needed in Murcia to 9.2 years in Madrid. Notably, in the Balearic Islands, citizens must spend 19.7 years of their salary to buy a home, significantly exceeding the national average.
Prices above the boom in some areas, according to Tinsa
The Tinsa report details that the average value of housing in Spain has increased by 41.3% since the minimum recorded during the great recession (Q3 2015) and is currently 16.6% below its historical maximum (Q4 2007), standing at €1,804/m2 in the summer.
However, there are some regions, provinces and provincial capital cities that exceed the levels of the real estate boom. According to the valuation company, the Balearic Islands is the only region that exceeds the maximums reached during the bubble years, standing 12.6% higher. Meanwhile, the region where the average value of new and used housing has increased the most compared to its post-crisis minimum is the Community of Madrid (+68.3%), followed by the Balearic Islands (+60.5%) and Catalonia (+51.9%).
Additionally, the study indicates that, for the first time, the province of Santa Cruz de Tenerife and the city of Málaga have surpassed their historical maximum housing prices.
"This quarter, Santa Cruz de Tenerife joins the Balearic Islands (+12.6%) as the only provinces to exceed the peak values of the previous cycle. The Canarian province is currently 0.7% above its previous highs. The province of Madrid is also close – at -6.7% – while Barcelona remains further behind at -20.3%. The greatest distance from maximums is in the province of Toledo, which is currently -38.3% below its peak," the study highlights.
In the case of provincial capitals, the document reveals that the cities that "exceed the highs of the 2007 bubble" are Palma de Mallorca (+10.1%) and, for the first time, Málaga (+1.3%). Close to reaching these highs are Santa Cruz de Tenerife (3.1% below its peak) and Madrid (-3.5%).
At the end of September, the most expensive provincial capitals in Spain were San Sebastián (€4,268 per square metre), Madrid (€3,895 per square metre), and Barcelona (€3,849 per square metre), followed by Palma de Mallorca (€2,929 per square metre) and Bilbao (€2,791 per square metre).
Conversely, the valuation firm notes that six provincial capitals face theoretical housing access efforts exceeding 50% of disposable income: Barcelona, Palma de Mallorca, Cádiz, San Sebastián, Málaga, and Madrid.
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