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The Unexpected Boom in Spain — Could It Happen in Argentina? - La Nacion Propiedades
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El fenómeno inmobiliario que nadie esperaba y vive el mercado de España
La tensión en los importes es fruto, para muchos expertos, de la combinación de una oferta escasa con una demanda que no para de crecer.
www.lanacion.com.ar
May 10, 2025
The real estate phenomenon that no one expected and the Spanish market is experiencing
The tension in prices is the result, according to many experts, of a combination of limited supply and ever-increasing demand.
Property prices in Spain are surpassing their own record prices.Ricardo Rubio - Europa Press - Ricardo Rubio - Europa Press
Many home purchases and sky-high prices. This is the summary of what the real estate market experienced in 2024 , according to figures published by property registries. The registry statistics, which are the source of the INE (National Institute of Statistics and Census), certified a new record in the average price of homes, at €2,086 per square meter . This makes last year the most expensive in history , surpassing the average prices of 2006 and 2007, the peak years of the real estate bubble at the beginning of the century, without taking into account the effect of accumulated inflation since then.
Residential building for sale in Madrid, SpainEduardo Parra - Europa Press - Eduardo Parra - Europa Press
For new-build properties , prices averaged €2,265 per square meter in 2024 , also the highest in the historical series. For existing homes, the €2,039/m² average paid is not higher than, but very close to, the 2007 price, according to land registry statistics.
Despite these being record prices , the market is already considering them surpassed because they continue to rise . In fact, in a year that has been on the up and up, registrars now place the average housing price at €2,164/m² (€2,338 for new apartments and €2,113 for second-hand ones).
The tension in prices is the result, for many experts, of a combination of limited supply and ever-increasing demand . The latter is also reflected in the registry statistics: Spain closed 2024 with 636,909 sales, a figure very close to that of 2022, which was the year with the most activity in the market since the bubble. Unlike in the first decade of the century, the majority of transactions now correspond to second-hand homes , although the sale of new apartments has increased significantly in percentage terms.
Sales of new apartments have increased by 22% compared to 2023.EUROPA PRESS - EUROPA PRESS
Santiago Carbó, professor of Economic Analysis at the University of Valencia and director of Financial Studies at Funcas, warns about this price imbalance that makes it "increasingly difficult to find affordable housing ." "My feeling is that, although the government has taken measures to curb rising housing prices, they take time to implement, and I doubt they will be noticeable in 2025 or even 2026. Thousands of apartments would need to be added to the market to alleviate this tension, and that takes years ," he explains. In any case, he rules out a crisis similar to the real estate bubble , as today the country is suffering from a mismatch between supply and demand, not massive debt, as it was back then.
José García Montalvo, Professor of Economics at Pompeu Fabra University, confirms that pressure on housing prices will continue to rise in the medium term due to strong demand, reflected in other indicators, such as the repeat sales index—also published by property registries and showing the sale prices of properties that have been sold more than once. The expert points out that, based on this parameter, homes have appreciated by 12% . And although new construction is increasing , with forecasts of up to 135,000 apartments started by 2025, its effect on prices will take time to be felt.
Property prices increased by 12%Ricardo Rubio - Europa Press - Ricardo Rubio - Europa Press
The boom in real estate activity is due to several factors. On the one hand, the improvement in macroeconomic indicators, with sustained job growth, rising wages, and a recovery in consumer spending, has boosted demand for housing and attracted a large foreign population to Spain. Furthermore, the drop in interest rates during the second half of the year has partially eased the financial burden for buyers, facilitating access to mortgage loans.
Of the nearly 637,000 transactions registered last year, 80% were sales of used homes. However, sales of new-build apartments grew strongly last year, reaching 131,764 transactions, which is almost 22% more than in 2023. This allowed it to gain some market share, as transactions involving second-hand homes increased by 6.4% in the year.
The interest of international buyers continues to be a pillar of the market, representing almost 15% of total transactions. The British, German, Dutch, Moroccan, French, Romanian, and Italian buyers account for the majority of these sales. And coastal destinations are the most popular: the Balearic Islands, the Valencian Community, and the Canary Islands account for around 60% of these transactions , according to figures from property registrars.
The Balearic Islands are one of the areas that attracts the most interest among property investors.Greg Cox
Regarding this phenomenon, Sergio Nasarre, professor of civil law and founder of the UNESCO Chair in Housing, warns that the growth in foreign demand has been exponential in recent years, rising from 4% in 2009 to 14.5% today. "When it becomes difficult for Spanish families to buy, others do so. And these buyers, in many cases, acquire homes without a mortgage , which puts the local population at a disadvantage," he notes. He also emphasizes that the rental market also lacks affordable alternatives , as recent policies have created insecurity for owners, limiting supply and increasing prices.
The year also ended with more mortgages signed than in 2023 , thanks to the surge in the second half of the year, fueled by the shift in monetary policy and the resulting lower interest rates. In 2024, 435,328 mortgages were signed, representing a 13.4% increase over the previous year. Almost 70% of home sales were made with a mortgage, while 30% were purchased without financing . In this regard, the registrars specify that "in areas where housing prices are higher, mortgage financing is typically used more, and vice versa."
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