Live News From Spain As It Happens

GRANTS of up to €250 are available this year for replacing older air-conditioning units in a bid to encourage greater energy efficiency. 

Not all regional governments offer funding, but for those which do, no deadline for applying has been set as yet – meaning it may not be too late to request a cashback.

Known as a Plan Renove ('Renewal' or 'Replacement' Plan), payments are made when installing fitted units with an energy-efficiency rating of at least A+.

Unfortunately, funds are not given for first-time installations – only for upgrading older, existing units with a higher energy consumption.

Typically, applicants need to be registered as resident in the region whose government is offering the cash, meaning the scheme is unsuitable for holiday-home owners who live in a different part of Spain or abroad.

Read more at thinkSpain.com

RESIDENTIAL property prices rose again in July outside of Spain's major cities, with homes for sale on the islands now breaking post-recession records.

Leading quantity surveyor association TINSA says the average price tag is now 3% higher than a year ago, and that the most recent full-month figures – for July 2024 – reveal an increase of 0.7% in values compared with those of June.

Whilst property price rises are beginning to stagnate in the country's largest metropolitan areas and in land-locked provinces, those in more traditional tourism zones are seeing an across-the-board increase in value.

This is particularly the case in the Balearic and Canary Islands, where property price hikes between July 2023 and July 2024 have reached 8.6% - nearly three times the rate of inflation.

In these offshore regions, average home prices are now above the historic highs seen in 2007 and early 2008 – a time when property values across the country reached unrealistic heights never witnessed before and which preceded a nationwide housing market crash, provoking a long recession.

There is no suggestion of a recurrence of this grim period in Spain's recent history, however: The typical value of a residential property on the islands is around 1.7% above that of late 2007 which, allowing for inflation over the 17 years since, responds more to a healthy demand than an unsustainable property boom.

Coastal tourism enclaves see above-average price increases

TINSA considers this demand to be location-specific, given the Balearics' and Canaries' status as mature and well-established holiday destinations, and says this same factor is also driving up home prices elsewhere on Spain's Mediterranean seaboard.

All down the east coast, homes have risen in value by an average of 6.2% in the past year, with a typical increase in the last month of around 0.4% on the mainland side of the Mediterranean, compared with 1.1% in the Balearics.

Slowdown in major cities with high housing demand

A general slowdown has been noted this summer in major cities, particularly Madrid and Barcelona, with year-on-year price rises at 2.1% - below the national average and lower than the rate of inflation.

DEMAND for mortgages to buy a home has begun to rise for the first time since 2022, despite rates being at their highest levels in nearly a decade.

According to the Central European Bank (BCE), three of the largest economies in the Eurozone – Spain, Germany and Italy – registered an increase in new mortgage applications in the second quarter of this year, after many months of lack of demand due to loans becoming far more expensive.

France, the remaining country in the Eurozone's 'top four' economies, reported no change in demand in the last quarter.

After plummeting demand due to interest rate hikes, applications for consumer loans are now beginning to increase in the Eurozone, the BCE reveals: Forecasts for the second quarter of 2024 in banks across the common currency area averaged around a 6% rise in demand, but latest figures show the reality is nearer 13%, with Spain, Germany and France topping the list.

Spain and Germany also registered a slight increase in business loan requests in the first six months of this year, whilst Italy and France reported a significant decline.

The common currency interest rate, or Euribor, fell below zero for the first time in February 2016, and remained in negative figures until late 2022, when it began to soar at a pace never seen before.

Having topped 4% on some occasions since then, the Euribor closed July 2024 on 3.567%.

Property price rise creates 'affordable housing' crisis in Eurozone 

The BCE report states that falling residential property prices have helped push up demand for mortgages in some parts of the Eurozone – particularly Germany, which has seen year-on-year decreases of around 5.7%, and France, with values dropping by 4.8% – although the opposite has been seen in Spain, where purchase prices continue to climb.

Read more at thinkSPAIN.com