The price of new housing does not stop rising and there are already 30 provinces in which the average value of new housing is above the maximum of the real estate bubble, according to the analysis of Euroval on data from Mitma. The Balearic Islands, Santa Cruz de Tenerife, A Coruña and Málaga are the regions with the greatest difference between the 2007 boom and the first quarter of this year.
“The price of new housing evolves unevenly. The result is that while in slightly more than half of Spain, prices rise compared to the maximums reached in 2007, in the rest of the country, this is not the case,” he says. Gumersindo Ruiz, director of Euroval.
The increase in these 15 years at the national level stands at 38.4%, a figure that has accelerated after the pandemic. The Balearic Islands represents the most outstanding data, where new housing today costs slightly more than double (108.2%) than in 2007, up to 497,244 euros. They are followed by Santa Cruz de Tenerife (79%), La Coruña (57%), Málaga (49.8%), Alicante (46.8%) and Teruel (41.4%), ranging from almost 328,400 euros of Malaga at 190,270 euros from Teruel.
“There are provinces with their local peculiarities. New developments in provinces with a weak housing supply can skew prices significantly upwards, and cause reference capitals to appear in this same ranking with cities in emptied Spain such as Teruel”, comment from the appraiser.
On the opposite side, in Ávila, residential prices not only have not risen compared to 2007, but are much lowerwith a fall of 60.8%, going from 146,730 euros at the peak of the boom to 57,583 euros on average today.
“In 2007 the real estate bubble spread to provinces that did not have a demand local or foreign enough to keep priceswhich explains why there are provinces with negative rates in the period we are considering”, they add.
What accounts for this difference
To explain the rise in prices in coastal provinces such as the Balearic Islands, Alicante, Malaga or Santa Cruz de Tenerife, one must focus on the pressure on tourist areas, which has intensified since the covid-19 crisis.
For his part, the provinces of Madrid and Barcelona show an uneven evolution. The average price of new housing in this period (2007-2022) has been 22%, while the Catalan province has only 9.1. Thus, the average prices in Madrid from 292,688 in 2007 to 357,757 euros in 2022. For its part, in Barcelona, while in 2007 they were practically similar (289,152 euros), now it remains at 315,448 euros, more than 40,000 euros of difference between Madrid and Barcelona.
“Despite the pandemic, in Madrid the prices of new construction have grown by 12% between 2020 and 2022. While in Barcelona there has been a decrease of 2% in this same period. It is not difficult to see here a certain fatigue in the rate of price increase when it reaches high levels, along with the peculiarities of population movements between nearby municipalities”, they highlight from Euroval.
The 21 provinces that represent price drops
But not all the provinces have registered increases in the prices of new construction with respect to the levels reached with the distortion of the previous bubble, in 2007. There are all kinds, provinces of emptied Spain, tourist areas or more. industrialized.
For example, the average price of housing in Seville in the first quarter of 2022 is the same as that paid in the maelstrom of 2007, although in the province there is intense promotional activity in municipalities that did not have high levels of prices, which may explain the balanced provincial result. From here, the decreases in the average values of new housing go from 0.9% in Cáceres or 2.3% in León to the previously mentioned in Ávila.
“It is logical that housing prices have not stopped rising, for two reasons. In the first place, because the supply of new housing is scarce and now the total number of sales of new housing is slightly less than half what it was then”, highlights Gumersindo Ruiz, director of Euroval.
“Secondly, because the current new homes they are different because incorporate greater energy efficiency and other quality elements such as more common space, which would collect part of the price increase. As for the provinces where this is not the case, the explanation is that prices rose at the time above a sustainable demand, and local factors that require a detailed analysis”, concludes the expert.
