New Property prices increased 7.3%, annually
The House Price Index for the third quarter of 2016, published this week by the National Institute of Statistics (INE), shows an annual increase of 4%. This highlights the “dynamism of the real estate market in much of the country”, according to Beatriz Toribio, head of research at fotocasa.
This represents the tenth consecutive quarter in which house prices have shown positive interannual rates and reflects “the normalisation process that our real-estate market is experiencing after eight years of crisis”.
Like all other real-estate market methodologies, the INE data reflects the “very unequal behaviour” in property prices and that “the real estate market moves at different speeds, with Catalonia, Madrid and the Balearic Islands at the top”, explains Toribio.
The real-estate index has recorded continuous year-on-year price increases in these regions and shows that the recovery of prices is much more evident in large cities like Barcelona and Madrid. On the other hand, in Castilla la Mancha, La Rioja and Murcia prices are still heading in the other direction. These areas recorded year-on-year falls of between 4% and 7%.
New Vs Second-Hand
The INE data also shows uneven behaviour between the prices of new and second-hand homes. Notably, the 7.3% increase in the price of new property, compared to a 3.5% increase for used property. However, this trend is reversed when we compare to the second quarter of 2016. Between the quarters, new property has decreased by 0.5%, while the price of second hand property has increased by 1%.
This is something that we expect to continue in 2017 with a lower supply of new properties pushing up prices.
