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The residential market shows in the second quarter of the year a continuity of the positive trend started in the first months of 2021, moving towards a generalized and progressive recovery, leaving behind the bad omens and slight price cuts caused by the pandemic.
The Tinsa IMIE Mercados Locales statistic places the average value of finished housing (new and used) in Spain at 1,421 euros per square meter in the second quarter, which represents a 2% growth compared to the same period in 2020. The price has increased by 18.7% from the low recorded in the first quarter of 2015, although it still remains 30.6% below the highs of 2007.
The increases are practically generalized, since the interannual decreases seen in the capitals in the previous quarter decreased in number in this second quarter to only 10 capitals, with moderate intensity except for Pamplona and Palencia, which presented a greater impact. On the contrary, many large capitals, such as Madrid, Barcelona, Valencia and Seville, maintain the upward trend started in the preceding quarter.
Madrid and Barcelona register slight interannual increases of 2.5% and 2.9%
According to Tinsa data, a total of 43 capitals show year-on-year increases in a range between 2% and 7%, with more moderate figures in the most dynamic markets and more accentuated in markets with less activity, traditionally more exposed to intense percentage variations.
Cities like A Coruña, Zamora, Cuenca and Ávila register interannual increases of over 10% in this second quarter, while Madrid and Barcelona registered slight increases compared to the first quarter and placed the interannual rate at 2.5% and 2.9%, respectively.
“Progress towards a recovery of values, generally exceeding the falls registered one year earlier, during the initial period of contraction of the activity ”, highlights Andrea de la Hoz, senior analyst of the Tinsa research service.
In his opinion, “the housing market has evolved favorably supported by a mobilization of replacement demand and solvent demand, maintaining a certain margin with respect to the evolution of other economic indicators. Looking ahead, the difficulty of access to housing on the part of the young segment, it can be a drag on the market when replacement demand, the main protagonist in recent quarters, cannot compensate for the total figures that have been registered so far ”.
After a first quarter of 2021 in which the bulk of the communities showed a moderation of the decreases of previous months, the second quarter of 2021 presents a continuity of the positive evolution with generalized year-on-year growth, with special intensity in the insular areas and the coast Mediterranean and North. The scenario is optimistic, although prudent, in view of the economic and structural uncertainties that may affect the evolution of the market in the coming months.
High rate of effort to buy
According to Tinsa, Spaniards spend on average 20.3% of their disposable family income to face the first year of mortgage. However, geographical differences in the level of financial effort, which relates family income to the average amount of mortgages in each area, continue to be significant in Spain.
According to the provincial average mortgage figures published by the INE for the first quarter of the year, Malaga is the province with the highest effort rate (28.3%), followed by the Balearic Islands (27.1%). On the opposite side, up to eight provinces show an effort rate of less than 15%. In the two main capitals, Madrid and Barcelona, the net financial effort reaches 19.9% and 23.4%, respectively. In Madrid, the districts of Salamanca and Arganzuela exceed the rate of 24%; in Barcelona, those of Sarrià-Sant Gervasi, Les Corts, Ciutat Vella, Gracia and Sant Martí.
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