According to the Housing Price Index (IPV) of the National Statistics Institute (INE) published earlier today, the cost of new housing in Spain increased by 6.5% year on year (7.3%, 2019) whilst second-hand homes (which make up the bulk of purchases) grew at 1.4% (4.7%, 2019)
Overall the cost of housing rose by an average of 2.1% in 2020 compared to the previous year 2019, and is the seventh consecutive annual increase.
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Whilst 2.1% represents the smallest increase since 2014 when prices barely moved at all (an increase of only 0.3% year on year) it should be remembered that 2020 was hardly a normal year and as such it is difficult to make predictions for the year ahead.
Between 2008 and 2013, the price of housing recorded annual decreases of varying intensity: 1.5% in 2008, 6.7% in 2009, 2% in 2010, 7.4% in 2011, 13.7% in 2012 and 10.6% in 2013.
It wasn't until 2014 that house prices turned positive, with an average annual increase of 0.3%, in 2015 the increase accelerated to 3.6%, in 2016 to 4.7%, in 2017 to 6.2%, and in 2018 to 6.7%. The upward accelerating trend was broken in 2019, with a 5.1% increase.
A comparison of the quarterly figures over the past decade show that on the whole prices of new housing and second hand homes have largely mirrored each others movements however in 2020 that seems to have changed with the cost of new house prices accelerating during the last two quarters of the year whilst second hand homes have are heading towards negative territory.
What everyone in the profession is asking, is whether second hand prices will trend upwards to meet new house prices or vice versa?
The winners and the losers.
In property prices as in life there are the winners and the losers, the largest decreases (in the 4th quarter compared to the 3rd) have occurred in the Basque Country, Navarre and the Balearic Islands, with decreases of 1.6%, 1.5% and 1.5%, respectively.
Conversely Murcia, La Rioja and Extremadura are the autonomous communities where prices increased the most compared with the third quarter.
Based on data provided by Housing Price Index (IPV) of the National Statistics Institute (INE) published 9 March 2021.
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