Sunday, July 3

House prices rose an average of 4.3% this 2021

The price of new and used housing it rose an average of 4.3% this year. It is one of the conclusions of the report of Forget it, which places the average price of residential homes at 1,470 euros per square meter in the fourth quarter of the year, 8.6% higher than in the same period last year and an average growth of 4.3% in terms of average price variation. The appraisals carried out by Tinsa throughout the Spanish territory show the consequences of the reactivation of the real estate market after the stoppage of 2020 as a consequence of the pandemic. The Basque Country and the Balearic Islands stand out as the most dynamic autonomous communities in price evolution.

“In the last quarter of 2021 there is an increase in the prices of the residential market that consolidates the trend started in previous quarters and reflects a growth environment in which demand is higher than supply and construction begins to reactivate prudently, which could be indicative of an upward phase of the real estate cycle ”, affirmed Cristina Arias, director of the Tinsa Studies Service through a statement.

With a broader perspective, since the third quarter of 2015, when the average price in Spain hit the bottom after the 2008 financial crisis, new and used housing has appreciated by 22.9%, and remains at 28.2% by below the highs of 2007.

Tinsa considers that household savings, consumer confidence and the new housing needs discovered during the lockdown have been the main drivers of the recovery, in an environment of historically low interest rates. There is also a greater demand for professionals, attracted by the higher returns of the residential product compared to other financial products of similar risk.

The proportion of mortgages on sales and debt ratios remain stable, despite the fact that appraisals show a reactivation of the preference for homes with larger surfaces, which had slowed down during the central quarters of 2021.


With regard to the supply of housing, it is being reactivated prudently and the numbers of visas issued during 2021 recover the level registered in 2019. “It is expected that the tensions generated by the high costs of construction materials will be diluted with the normalization of supply chains, but new pressures may arise in costs derived from the shortage of labor in the sector ”, highlights the head of the Tinsa Research Service.

Given that the scenario of price growth in the last quarter is accentuated by the economic contraction registered in the same period of the previous year, the average variation in 2021 (understood as the average of the inter-annual variations of the four quarters of the year) It provides a more complete view of what 2021 has meant in the housing market than the year-on-year variation data for the fourth quarter considered in isolation.

The bulk of the communities have registered average price increases between 2% and 6% in 2021 as a whole, with the Basque Country (+ 9.4%), the Balearic Islands (+ 9.3%) and Galicia (+6, 8%) as the regions with the highest average variation during this year. Another group of four regions experienced an evolution in 2021 more in line with a stabilization trend in 2021. These are Navarra (-1.9% on average), La Rioja (-1.1%), Castilla y León (+0 , 1%) and Aragon (+ 0.9%).

If the fourth quarter of 2021 is compared in isolation with respect to the same period of the previous year, all the autonomous communities and regions register positive variations with respect to the low point of 2020. With strong interannual increases above 10%, Galicia, Andalusia and Madrid, and, exceeding 12%, the Balearic Islands and the Basque Country. The most moderate increases in the interannual rate were found in Melilla (+ 1.2%), Castilla y León (+ 2.9%) and Catalonia (+ 4.4%).

Misleading averages and local evolution

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In any case, the averages are misleading in the real estate sector, since price formation is highly influenced by the environment, the economic situation of the area, the characteristics of each property and even the composition of the neighborhood. But globally, Tinsa data show that the Community of Madrid (+ 48.2%), Catalonia (+ 33.4%) and the Balearic Islands (+ 34.7%) are the autonomous communities that have appreciated the most since their minimum after the financial crisis of 2008. In the vast majority of provincial capitals, the average variation in prices during 2021 shows growth. Six of them exceed 10% (Cuenca, Bilbao, Vitoria, Ávila, Zamora and A Coruña), while another 13 have moved in a more stable scenario, with growth of less than 1.5%. The average variation in prices has been negative (falls) during this year in the cities of Palencia, Soria, Huesca, Cáceres and Pamplona.

The city of Madrid has shown greater dynamism in terms of price evolution than Barcelona. The average variation in the capital of Spain in 2021 was 5.8%, double that in Barcelona (2.9%). If the specific situation is analyzed in the fourth quarter of the year, housing in Madrid is 10.5% more expensive than it was in the fourth quarter of 2020, compared to the 4.8% growth registered in Barcelona. The micro analysis in large capitals reveals that, in Barcelona, ​​most of the districts experience price increases compared to the previous quarter, although 6 of the 10 districts remain below the levels of the same period of 2020. Gràcia is the district with the most appreciation during the year (+4.9% year-on-year), followed by Nou Barris (+2.9%) and Sants-Montjuic (+1.7%).

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