Spanish house prices up 5.25% y-o-y in 2018

Spanish house prices rise by 5.25% during 2018, from y-o-y rises of 3.32% in 2017 and 0.1% in 2016. In fact, it was the biggest annual rise since 2006. Quarter-on-quarter, house prices increased 1.34% in Q4 2018.

Demand is rising strongly

Home sales in Spain surged 10.6% to 481,220 units in the first eleven months of 2018 from the same period last year, after annual rises of 15.4% in 2017, 14% in 2016 and 11.5% in 2015, according to the Instituto Nacional de Estadistica (INE). Over the same period, existing home sales increased 10.4% while new home sales rose by 11.5%. The continued increase in transactions was mainly driven by foreigners buying homes on the coast and in cities like Barcelona and on the Costa del Sol, one of the country’s most popular areas with overseas purchasers. Most foreign homebuyers are Britons, French, Germans, Belgians, Italians and Swedes.

Because of rising demand, construction activity is picking up again. During the first seven months of 2018, the number and area of residential building permits increased by 7.7% and 9.5%, respectively.

Rents, rental yields: yields in Barcelona and Madrid are now moderately good at 4.40% to 5.15%

Madrid apartment costs are around €4,382 per sq. m.

Spain: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Barcelona € 570,480 € 2,092 4.47%
Madrid € 525,840 € 2,060 4.70%

Recent news. The Spanish economy grew by about 2.6% in 2018, after growth rates of 3% in 2017, 3.2% in 2016, 3.6% in 2015, and 1.4% in 2014. The  European Commission expects Spain’s economy to expand by 2.2% this year and by another 2% in 2020.