House prices in Spain in February

With the start of a new month comes a new report on Spanish residential property prices by the reputable valuations firm Tinsa. This time round, data suggests house prices in Spain in February 2020 were an average of 2.4% higher¹ than during the same period last year.

However, before you get carried away with thinking, “This seems like a large increase considering house price increments were due to slow down in 2020”, I must stress that the monthly change from January 2020 is actually -0.1%. That is to say, house prices are virtually the same as last month, but have risen an average of 2.4% since this time last year.

So, what was the cause of this month’s year-on-year property up-valuation?

Balearic Islands increase markedly

In order to provide like-for-like zonal valuations, Tinsa divides the Spanish territory into 5 categories: provincial capitals and large cities, metropolitan areas, the Mediterranean coast, the Balearic and Canary Islands and all other areas.

Normally, provincial capitals are the main protagonists of change, since Spain’s largest cosmopolitan hubs like Madrid, Barcelona, Valencia and Málaga have dynamic housing markets and are often the catalysts for pricing tendencies. Last month, the interannual change was +3.3% (roughly in line with the national average). But this was not to be the decisive area.

It was, in fact, the Balearic and Canary Islands that most affected house prices in Spain in February. Residential property in these regions soared a massive 7.6% year-on-year, making February's figure the eleventh significant annualised increase in the last twelve months.

Mediterranean coast below average

For its part, the Mediterranean coast tempered the significant price hikes on the islands by registering a healthy average 1.4% year-on-year gain. As I’ve said before on this blog, the price fluctuations of residential property on the coast usually correlate quite strongly with average figures for the country as a whole, and house prices in Spain in February were no exception.

The bigger picture

To put it simply, buying a home on the Med still statistically represents the best value in terms of where prices are at now compared to their highest levels. On average, you can expect to pay over 40% less for your sunshine home near the sea than you would have done over a decade ago when prices were at their peak.

When compared to each of the other Tinsa geographies – especially the Balearic and Canary Islands, which are the only regions to now supersede their pre-crisis valuations (+5.6%) – and the consolidated average national figure (-33.1%), it’s an elementary calculation to see that Mediterranean property remains as solid an investment as you can make in Spain.

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What did you think of today’s post about house prices in Spain in February? Did you find it useful? If so, please leave me a message in the comments below and I’ll get back to you as soon as possible!

Sources:

¹ https://www.tinsa.es/servicio-de-estudios/imie/general/febrero-2020/

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Year-on-Year House Prices in Spain in February Up 2.4%