Eight-year high for Spanish property price increases, data shows

There are even fewer reasons not to invest in Spanish property, with data showing that the market is proving attractive and affordable.

Home values in Spain increased in the first quarter of 2016 by an average of 6.3% – which is the highest rise recorded since the third quarter of 2007, new data has revealed.

The Spanish National Statistics Institute (INE) released figures this week that showed how the country’s property market has emerged from the crash that followed the bursting of the property bubble in 2008…

A five-year slump suppressed home values, scared away buyers and contributed to a massive ‘brain drain’ in Spain, with the economy suffering through a vicious cycle of anaemic growth, lack of confidence and harsh austerity measures.

However, the INE data shows that by mid-2013 Spain had emerged from a second recession and begun posting positive increases in GDP, employment rates and house sales. Property price increases followed shortly after, culminating in this week’s data that shows resale homes rose in value by 6.4% during the first three months of the year.

New-build properties – which were the worst hit during the lean years as many developers went bust, houses went unfinished or unsold, and an oversupply dragged down values – also saw an encouraging 6.1% increase in prices over this same period, making Q1 2016 the most promising quarter for Spain’s property industry since Q3 2007.

However, unlike eight years ago, this current increase is unlikely to preface any sort of impending crash. Growth this time around has been more measured, more sustainable and is based on solid foundations of sustained economic growth and both foreign and domestic interest.

In terms of house sales, the INE data also showed that the number of transactions in Spain’s residential housing market in April was a massive 29% higher than the same month in 2015, with 35,199 properties bought and sold that month. This is the largest increase year-over-year since August 2010, and proves once again that buyers have returned to the Spanish property market in their droves.