Property prices in Spain have risen by 7.3 percent new figures revealed last week, which also showed a trend for buyers purchasing houses with cash at the start of 2023.
New data from Spanish housing portal Idealista shows that house prices in Spain have continued to rise in the first quarter of the year. In fact, the rise even accelerated in March, growing by 7.3 percent year-on-year According to Idealista, the March increase is the largest since they started recording the figures.
This growing appetite for buying property in Spain comes despite inflationary pressures limiting spending power and the rise in the Euribor and consequent effect on mortgage interest rates, something especially pronounced in Spain. So if you are hanging on to buy hoping for a barging you may have a long wait
So if house prices are rising, where in Spain are they rising the most? Well, in Spain’s ten most popular (and populous) cities, prices were up across the board in March.
Perhaps unsurprisingly, Barcelona maintains its position as the most expensive city in Spain, prices rose 2.7%. Madrid is second most expensive city in Spain and prices are 5.2% more expensive than in March 2022.
Prices in March also rose year-on-year in Palma de Mallorca (11.3%), Valencia (11%), Seville (7.9%, Murcia (8.5%), and Malaga (7.8%) while prices in Las Palmas de Gran Canaria grew in March (5.4%) as well as in Zaragoza (4.8%) and Bilbao (2.7%.)
So with a cost of living crisis and rising interest rates making affordable mortgages harder to come by, what explains these rises and where is the demand coming from?
Interestingly, as house prices in Spain continue to rise, so does the number of purchases that are done without mortgages – that is to say, as potential first time buyers are put off by rising mortgage rates, more people are buying property in cash than they used to.
This market trend is reflected in figures from Spain’s College of Notaries. According to records, in January over half (53.4 percent) of property purchases were made without a mortgage. In fact, the rate has exceeded 50 percent every month since September 2022. what the data means is that those in the market are now more an investor than first time buyer.
It is worth noting though that if you buy a property cash, in Spain a non-resident is unlikely to be able to release funds from the property later without selling it.
If you are looking to buy a property in Spain and need a mortgage, email mark@vci-network.com for the latest criteria.