The forecast is in: Spanish property prices to rise 6% this year

Spanish property prices have been rising steadily for nearly two years, and 2017 looks set to accelerate that trend.

The largest real estate services firm in the world, CBRE, has this week published a bold and rather encouraging prediction that Spanish property prices could rise by as much as 6% on average over the course of 2017.

Building on positive data from May – where the average property price increase was 5.3% higher than for the same month in 2016, the CBRE analysts expect that this positivity is set to continue; if not all year and for all parts of the country, then certainly in the places that generally see the highest demand for property…

This includes the popular coastal regions of the Costa del Sol, Costa Blanca and Costa Brava, the Balearic and Canary Islands, and the big cities of Madrid, Barcelona, Valencia and Málaga.

These regions will not only see sustained demand for property and a strong increase in prices, but may also welcome back significant building activity. CBRE forecasts that demand for new builds is on course to reach between 120,000 to 140,000 properties per year by next year, and that means new urbanisations and developments in the Costa del Sol and other regions where demand could soon outstrip supply.

Similarly, there are also positive rumblings in the rental market – which often acts as an accurate litmus test of the health of Spain’s property market.

CBRE expects rental demand to increase by an average of 1.5% nationally, while in the stronger property markets the annual return on investment is likely to hold firm at 5% – meaning a potential increase in buy-to-let home purchases.