Property prices in Spain keep rising

New evidence from both TINSA (Real Estate Evaluations) and the Sociedad de Tasación (The Evaluation Society) suggests that property prices keep rising.

The price of re-sale properties in Spain went up by 17.24% in the last year and the price of new homes rose by 15.27% in the last 12 months. However, a slight slowing down is expected in the second quarter.

According to TINSA, the average price of new properties is €1.488 per m2 and €1.227 per m2 for re-sale properties. The general director of TINSA, Luis Leirado attributes the price rise to low interest rates. The creation of more jobs and the rise in the amount of people investing in property are other contributory factors for the great demand.

The yearly rise for new homes in the capitals of Spanish provinces was 17.92% up to €1.962 per m2 and a rise of 13.03% outside the capital, a price of €1.230 per m2. According to la Sociedad de Tasación, the average price was €1.802 per m2, 8.1% above that of 2002. With regards to second hand homes, the rise in the capital of the provinces was up to €1.605 per m2 outside the capital, €1.019 per m2.

TINSA also rules out the possibility of a fall in property prices similar to that of the early 1990's. Meanwhile, the Sociedad de Tasación and Spanish Real Estate Experts predict that prices will continue to rise, despite predictions by The Economist, that prices in Spain would drop by 30% in the next four years.

Madrid, Barcelona, Pamplona and Burgos are the most expensive places to buy a property in Spain, with prices in Madrid at €2.607.0 per m2. Still representing great value for money, in Andalusia re-sale properties were valued at €961.1 per m2. However, encouragingly for investors in the province of Málaga, prices for second hand homes rose by 24% in the last year, only upstaged by Madrid, with a rise of 25%.

Source: Summary of articles from 5 días, El País, and Inverca

Diana Morales, 23 Jul 2003 - Intelligence