PRICES SOAR: Booming population growth causes house prices to rise in Spain

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PRICES SOAR: Property went up by 15.8 per cent in the Balearics. Photo: Shutterstock

SPAIN’S growing population is causing house prices to continue going up.

According to real estate website, idealista.com, booming population growth is assisting house prices, boding well for those who already own a home, and providing a potential investment opportunity for others.

The site explains that while house prices rose by an average of 8.4 per cent in Spain in 2018, some areas were affected more than others. And this distinction did not just come down to areas where prices are traditionally high, such as Madrid or Barcelona.

Of the 10 Spanish provinces whose population grew last year, six of these were among the areas with the highest increases in house price, according to data from the Spanish Institute for Statistics INE. In total, 40 provinces also saw housing prices grown in 2018, bringing Spain’s average price to €1,720 per square metre.

According to idealista.com, this growth goes beyond the normal fluctuations expected in supply and demand, and can partly be explained by an increasing number of people, which grew by 0.32 per cent last year. The property site also believes that easier access to credit, a return to investment in housing, improvements in wages, as well as consumer confidence, have also helped.

The most impressive increases in property prices were found in Santa Cruz de Tenerife, where housing soared by 22 per cent in 2018, while Madrid was not far behind at 20.2 per cent.  Meanwhile, Las Palmas’ prices rose by 17.9 per cent, the Balearic Islands by 15.8 per cent, and Barcelona by 11.9 per cent. At the same time, Madrid and the islands also recorded the largest rates of population growth.

Further interesting results were seen in La Rioja, where prices grew by 11.4 per cent while its population increased by 0.1 per cent, and Malaga where housing shot up by 11.1 per cent while the population grew by 0.6 per cent in Andalucia.

The same pattern was found in reverse, where areas where house prices fell also saw population figures decline. In Teruel, prices reduced by 4.6 per cent, while the residency dropped by 0.7 per cent, in Caceres houses fell by 3.9 per cent at the same time that population reduced by 0.9 per cent, while in Cuenca prices decreased by 2.3 per cent as population figures fell by 0.8 per cent.

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