Spanish property prices could enjoy 6.3% rise in 2016

Whether buying for investment or lifestyle, the lure of property in Spain has begun to strengthen once more.

New analysis from the property division of Spain’s Caixa bank forecasts Spanish property prices to rise by as much as 6.3% in some parts of the country this year.

Having seen national average price declines halt in 2015, across Spain property values are expected to increase in most regions this year, but the more popular areas of the country – namely the coastal resorts of the Costa del Sol and the Costa Brava, as well as the large cities of Barcelona, Madrid and Valencia – will post more robust price rises, Caixa believes…

Prices in regions such as Andalucía will increase by an average of 3.3%, the bank said, but affordability will remain the market’s key trait – since the peak of 2007, average home values in many parts of the region are still some 40% below record levels.

Since hitting an historic price per square metre peak of €2,952 in April 2007, homes on the Costa del Sol now retail for an average of €1,619, meaning that a typical three-bedroom apartment will set a buyer back around €161,900.

Speaking of ‘averages’ on the Costa del Sol is difficult, of course, given the immense variety that exists in the region. But this data does give a good indication of trends, and suggests that even the lower-end of the market is set to experience prices increases in 2016.

Meanwhile, the more established markets of Marbella and surrounding areas will continue to build upon the price increases first noted in 2014.

As a result, interest in property on the Costa del Sol is set to increase substantially, Caixa projects, with transactions set to rise by about 13% compared to the number of deals in 2015.