Despite this, housing prices remain high. interest rate hike. The indicators show that house rental prices the highest rises. A report published this Wednesday by Solvia It ensures that high financing costs and ongoing inflation have a direct impact on the real estate market, with a 1.5% drop in quarterly activity. To most experts, two consecutive quarterly declines appear to be the start of a trend that will become chronic in the commercial desert in the summer.
“High mortgage costs with an Euribor reference rate of over 3.86% in May and low savings capacity of households will continue to determine the future of the housing market throughout the year,” said Ernesto Ferrer-Bonsoms, Solvia’s Real Estate Business Unit. Director Ferrer-Bonsoms said: “Given this situation, we maintain our forecast that prices will rise moderately, with increases of 1.5% to 2.5% at the end of the year.” The local real estate office is the one that can suffer several months of sales drought with a complex output.
Valuation Society published a new issue of its ‘Real Estate Industry Trends Report’, which includes updated information up to June 2023 on both the new home price development and other own indicators. The study concludes that despite the current context of rising interest rates and slowing home sales, the average cost of new homes increased by 6.4% year-on-year to €2,809/m2 in June 2023. Below the maximum levels at the end of 2007 (2,905 €/m2). The rhythm of increase softened compared to December 2022, when it recorded an annual increase of 7.1%. Consuelo Villanueva, Director of Institutions and Major Clients at Appraisal Society, said: “The main reason for these price increases is that new housing supply is less than demand.”
But the evolution of real estate activity is progressing by neighborhoods. According to the Solvia report, La Rioja and Navarra had the largest increases, up more than 5%, while the main decreases were in Illes Baleares, Galicia and Andalusia, with decreases between 4.6% and 7%.
Regarding provinces, Gipuzkoa, Madrid and the Balearic Islands all had prices above €3,000 per square metre, followed by Bizkaia and Barcelona, which did not exceed €2,900/m2. Malaga, Santa Cruz de Tenerife, Girona and Las Palmas, all washed ashore, were over €2,000/m2. Ciudad Real and Badajoz failed to reach €700/m2. Most of Spain’s 30 provinces have prices starting from 800 €/m2, but in no case do they reach 1,500 €/m2.
Rent
In the first quarter, the rental price in Spain continued its upward trend and amounted to 11.6 €/m2 per month, which means an increase of 8.4% compared to the same period of the previous year and 0.9% compared to the previous quarter. At provincial level, Barcelona has the highest rents at 16 €/month/m2; followed by Madrid (14.9 €/month/m2), Illes Balears (14.6 €/month/m2) and Gipuzkoa (14 €/month/m2); The province with the lowest rents is Ciudad Real with €5.4/month/m2. On the other hand, the largest increases were recorded in Granada (9.1%), Jaén (7.8%) and A Coruña (5.6%), with the main decreases in Lleida (-21.3%) and Girona (-21.3%). -13.8) took place. and Ourense (-6.3%).
As the evolution of new developments moves towards moderation of activity throughout the entirety of 2023, interest rates remain so high alongside rising land prices and the costs of new jobs continue to be marked. makes it difficult to access credit for both developers and potential buyers. In this context, Solvia’s analysis shows that construction permit levels in 2023 will not exceed the levels of the previous year.