Tinsa reports a 1.2% rise in Spain’s real estate prices in December, with a year-on-year increase of 5.5%, fueled by lower interest rates.
In the realm of Spain real estate, a notable shift has transpired, as housing prices have ascended by 1.2% in the final month of the year, according to the latest report from Tinsa. This upward trajectory has culminated in a year-on-year variation of 5.5% for December 2024, marking a continuation of the price surge that commenced in October. This phenomenon appears to be largely fueled by a reduction in interest rates, which has invigorated the housing market.
The Tinsa Imie General and Large Markets index, released on a Tuesday, indicates that residential prices have not only increased but have done so with a vigor that is particularly pronounced in regions with a robust tourist presence, such as the islands and the Mediterranean coast. In contrast, metropolitan areas and major cities are experiencing a more tempered recovery, attributed to the greater weight of local wages and the accompanying challenges in accessing housing.
The final data for December reveals that the year-on-year variation in the price of both new and used housing for the fourth quarter of 2024 stands at 4.6%, a slight uptick from the provisional figure of 4.4% reported on December 30. Tinsa’s analysis indicates that the price of new and used housing has escalated between 0.8% and 1.6% from November to December across various categories. The Mediterranean coast has seen the most significant increases, with a 1.6% rise, while inland municipalities have recorded more modest gains of 0.8%.
When examining the annual cumulative data, it becomes evident that all categories of housing have outpaced inflation, with increases ranging from 3.1% in metropolitan areas (resulting in a real increase of 0.3%) to a staggering 11.5% in the islands (8.7% in real terms). In capitals and large cities, nominal increases of 5.1% translate to a real increase of 2.3%.
The resilience of employment and the restoration of household purchasing power are pivotal in sustaining demand, which is further bolstered by lower interest rates and improved access to credit. Since reaching its nadir during the financial crisis, the average value of housing in Spain has appreciated by an impressive 46.7%. In the islands, this figure escalates to 58.4%, while capitals and large cities have experienced a 54.4% increase.
Despite this upward trend, housing prices remain 13.7% below the peaks observed during the real estate boom of December 2007. Notably, the islands stand out as the only category currently surpassing their previous highs, boasting a remarkable 7.6% increase over the zenith of the real estate bubble. In contrast, other categories lag behind, with large cities and capitals trailing by 9.6%, while other municipalities fall between 10% and 25% below their historical maxima.
The Spain real estate market is navigating a complex landscape of recovery, characterized by regional disparities and a delicate interplay of economic factors that continue to shape its trajectory.
