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House prices start to stabilise while rental is still falling
07 April 2021 @ 13:01


In the first three months of the year, the price of housing in Spain has fallen by 0.6% year-on-year, slowing the decline of the previous quarters.

The fall in the price of houses for sale in Spain is moderating a year after the outbreak of the health crisis and is approaching a stage of stability, according to a study by the consultancy firm Gesvalt.

The company affirms that in the first quarter of the year the price has fallen by 0.6% year-on-year, breaking with the drop of more than 1% registered in the three previous quarters. Thus, affirming, "it is approaching stabilization, scheduled for the middle of this year."

The company's Research team places the price of housing at 1,388 euros / m2, which means that "it is still above the forecasts made at the beginning of the pandemic, where declines of more than 3% were expected."

At the end of March, seven autonomous communities already registered house price increases. The most notable increases are those of Asturias (+ 2.1%) and La Rioja (+ 1.6%), while the Canary Islands, Cantabria, Madrid, Navarra and the Basque Country have registered increases of less than 1.5%. On the other side of the table, the decreases in Murcia (-2.9%), Aragón (-2.1%), and Galicia (-2%) stand out, which had increased their price in the last quarter of 2020, according to Gesvalt.

After these variations, the Balearic Islands regained the first position in the ranking of house prices in Spain, with an average of 2,324 euros / m2, while Madrid fell to the second position with 2,267 euros / m2, followed by the Basque Country, with 2,232 euros / m2.

At the bottom of the ranking are Extremadura (841 euros / m2), Castilla-La Mancha (€ 857 / m2) and Murcia (€ 984 / m2). They are the only three regions in Spain where m2 currently costs less than 1,000 euros.

In the case of the provinces, there are 19 with a unit value below 1,000 euros / m2, while Guipúzcoa, Vizcaya, the Balearic Islands, Madrid and Malaga register a price above 2,000 euros for each m2.

Despite the price adjustment registered in the last year, coinciding with the Covid-19 crisis, the theoretical effort to buy a home has increased, weighed down by the loss of purchasing power of families. According to Gesvalt, at the national level, the number of years of salary that a middle-income household would need to dedicate to be able to acquire a medium-type home has increased by three tenths, to stand at 7.3 years.


The study by the consultancy firm also emphasizes that "the trend of displacement of demand towards single-family homes and peripheral areas of cities continues, driven by the new needs generated by the pandemic and the rise of teleworking, which reduces the necessary trips to business centres ".

Proof of this is the year-on-year increase in the price of housing for sale in some areas of large cities. In Madrid, for example, the most notable increases compared to last year have occurred in the districts of Moratalaz (+ 3.2%), Vicálvaro (+ 2.5%) and Moncloa (2%), while in Barcelona the main increases were in the neighbourhoods of Hortá-Guinardó (+ 2.7%), Grácia (+ 2.5%) and Sarriá- Sant Gervasi (+ 2%).

In Valencia, these increases are more especially pronounced in districts such as Poblados del Oeste, Ciutat Vella and Quatre Carreres, while in Seville the most striking data are those of Macarena, Casco Antiguo and San Pablo-Santa Justa.

Gesvalt's study also highlights that rental income continues to decline sharply. In fact, in general terms, the fall in prices in the rental market has once again been somewhat more pronounced than in the sale and purchase market.

By provinces, Barcelona is the only one with an income of more than 16 euros per m2 per month, although the average exceeds this level by the minimum. Madrid is the second province with the highest average price (15.08 euros / m2 / month), followed by Guipúzcoa (14.58 euros / m2 / month) and the Balearic Islands (12.97 euros per month per m2). On the other hand, Cuenca, Jaén, Teruel, Cáceres, Zamora and Ciudad Real, provinces where leasing is less established, currently register rents of less than 5 euros per m2 per month.

If we look at the data by cities, Barcelona and Madrid are the only municipalities where the average rent is above 16 euros per month per m2, while in San Sebastián the average is 15.5 € / m2 / month. "In these cities, the average rental prices of 90 m2 houses are around 1,600 euros", Gesvalt emphasises.

On the other hand, the municipalities with more than 50,000 inhabitants with the most affordable rents in Spain are in the provinces of Alicante and Jaen, specifically Elda, Alcoy and Linares (Jaén), with a price below 4.5 euros per m2 per month.

During the year of the pandemic, rents in Spain fell by 3.8%, reaching an average of 10.8 euros / m2 at the end of March. A fall that has been more marked in the large rental markets, led by Barcelona (where they have fallen by 14.3% in one year) and followed by Madrid (-10.7%), Palma (-8, 7%), Valencia (-6.3%), Seville (-6.1%) and Malaga (-5.3%).

And for now, experts foresee further declines in income in the coming months, although stabilization could come from summer, depending on the evolution of the covid and regulatory news.



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