House Prices In Spain In January 2020 Up 1.6%

House prices in Spain in January 2020

For those readers keen to keep abreast of the Spanish property market trends, today’s post is the latest update and looks at house prices in Spain in January 2020 and how they compare to the same period in the UK.

Valuations experts Tinsa published last week its monthly report¹ on annualised house prices in Spain in January 2020 and its findings show a very moderate, 1.6% average increase compared to the first month of 2019.

Residential property in provincial capitals and large cities was the main driver of the positive year-on-year price rise, having increased by a massive 4.8% on the same period last year. The only other index category to record a positive figure was “all other municipalities”, whose property prices grew 0.9% in the month to 31^st January 2020.

Elsewhere in the Peninsula, the data told a slightly different tale. In metropolitan areas, the Balearic and Canary Islands and the Mediterranean Coast, prices suffered a year-on-year slow-down to the tune of -2%, -2.5% and -0.3% respectively.

On course for tempered growth in 2020

Despite 1.6% being the lowest annualised figure for the month of January since 2017, price growth – as a national average, at least – is continuing in-line with predictions.

After all, experts have forecasted 2020 to be a year of more gradual pricing gains within the Spanish residential property market compared to the last couple of years. For more on this topic, check out this article I wrote recently:

• What Is The Price Of Property In Spain At The Turn Of The Decade?

Putting house prices in the frame

If you’re wondering where house prices in Spain currently stand in terms of their all-time lowest and highest levels, Tinsa also gives us an insight every month. Its latest report highlights the fact that, nationally, they are still a giant 33.1% off their 2007/08 peaks and are, in fact, closer to their minimum values registered in 2014 (16.5% higher).

What this means is that, while you won’t find anywhere near as many bargain bin-type distressed properties as you might have done five years ago, house prices in Spain in January 2020 are still very reasonable and eminently affordable – especially if you're buying from abroad.

A practical example

To illustrate the point, I’ll compare the most recent fluctuations of the UK housing market to the value of property in Spain.

House prices in Spain / Costa del Sol

Depending on which sources you consult, you’ll find that average house prices in Spain in January 2020 are somewhere between €1,700 and €1,750 per square metre. In the province of Málaga and on the Costa del Sol, where property is (understandably) more sought-after, you can expect this average to rise to a shade over €2,200 per square metre – again, depending on valuation.

To give you an idea of pricing trends, built area in coastal areas is currently worth anywhere between bang on the national average (approx. €1,700/m²) and circa €3,000 per metre squared in districts housing the most exclusive addresses.

Click on the banner below to discover Costa del Sol properties matching your budget and individual requirements:

House prices in the UK

Before we look at average property prices in terms of pounds and pennies, let’s look at the corresponding year-on-year price increment in respect of UK homes last month.

According to the Halifax House Price Index², the annualised national property price growth in January 2020 for the UK was 4.1%; a full 2.5% more than in Spain. Great if you own a home, not so good if you don’t.

When converting these percentages into real-world valuations, it’s important to note that the UK system is slightly different to the Spanish one. For instance, it’s not so common to go by a price per square metre calculation; partly due to the imperial/metric stand-off and also because the asset is typically valued as a whole.

With this in mind, the above Halifax index values the average UK home at ₤240,054 as at the end of last month. Using today’s exchange rate of ₤1.00:€1.19, this equates to €285,423.

Now let’s look at London. Given that it carries a similar level of attraction in Britain as the Costa del Sol does in Spain – albeit for very different reasons – I feel like this comparison is fair enough. Property portal Zoopla³ estimates that the current average London home is a whopping ₤671,989 (just shy of €800,000); an increasingly unattainable sum for many Brits.

Why am I making this comparison?

Well, simply put, because the current property market outlook is perfect if you are looking to move to Spain from the UK in the short-to-medium term. Thanks to a mixture of high levels of employment, decent wage rises, low inflation, low interest rates and a sharp decline in the number of properties for sale at the end of 2019, fears of the UK housing market imploding post-Brexit have been put to bed.

Furthermore, as a property owner in the UK, you can see the value of your home creep up month-by-month at the same time as searching for perfect sunshine homes in Spain, whose price is not forecasted to change as dynamically as in recent years... just as we've seen with house prices in Spain in January 2020.

Can you guess what the moral of the story is?

Yes, of course, but I'm going to say it nevertheless: now is still a very good time to buy on the south of Spain's Sunshine Coast. The combination of factors mentioned above is favourable for UK buyers especially, while all expats can take advantage of the stunted growth of house prices across the board. 

Keep your eyes peeled for more Spanish property market news and updates on the VIVA blog, and please do leave me a message in the comments below if you've got something to add!