HOME prices in Spain show a substantial year-on-year increase despite rising mortgage interest and a general fall in sales, according to a leading valuation group.
Tinsa publishes monthly figures showing fluctuations in market prices for residential property, and has recently released data for June 2023.
Although Tinsa expects home values to experience slower growth in the medium term as a result of Eurozone interest rates soaring, the property survey society says many sought-after areas in Spain are 'hanging on' – or even 'thriving'.
The association's research reveals that home prices went up across the board by 4.6% between June 2022 and June 2023, although this growth was less marked than year-on-year rises seen in May, at 4.8%.
New builds rose in value by 6.4% in June this year, based upon the same month in 2022.
Fastest Euribor rises in history
Overall, residential property prices have been climbing non-stop since 2021, although at a gradually slower rate due to drastic financial decisions taken by the European Central Bank (BCE).
After more than six years with the Eurozone interest rate in minus figures – since February 2016 – they rocketed to around 4% within 10 months, and have gone up yet again in July by 0.25 percentage points.
The Euribor, as the common currency interest rate is known, currently stands at 4.153%.
Exactly one year ago, in July 2022, the Euribor was just 0.992% - and only rose above zero for the first time in April, when it hit 0.013%.
Rate increases at this pace have never been seen before in the history of the euro.
Tinsa cites two factors that have kept the property market reasonably buoyant despite the somewhat extreme Euribor rate hikes: The popularity of Spanish homes to overseas buyers, who are less likely to need a mortgage, and 'stability in employment' in Spain which is 'contributing to consumer confidence and household solvency'.
“To this end, residential demand is becoming more moderate, but without plummeting, and average home prices are maintaining the trend towards stabilising, or slowing down very gradually,” clarifies Cristina Arias, service manager for research at Tinsa.
Where the growth is: 'Resistant' regions
Price growth slowdown in the past eight months has been most notable in provincial capital cities, says Tinsa – particularly very large metropolitan areas.
Back in November 2022, residential property values in cities had scaled fresh heights of growth – 8.5% in 12 months – but by June 2023, the inter-annual rise was just 4.1%.
Read more at thinkSPAIN.com