STRONG property market activity and growth is being experienced in five of Spain’s key cities, giving potential buyers a renewed sense of confidence, according to new analysis.
The highest residential prime property prices are in Madrid where values increased 9.7 per cent during the year to March 2019, and are 50.1 per cent higher than five years ago. This is the strongest growth of any region in Spain.
Transaction activity has also been strong and sales numbers are now just 23.6 per cent below their peak in 2006, compared with a national average of 39 per cent. These are the findings of an insight residential report compiled by international real estate advisor Savills. It points out that new residential projects are being built and the increase in construction looks set to be maintained.
Values in Catalonia increased 7.6 per cent during the year to March 2019, taking the five year growth to 40.5 per cent and although price growth has slowed slightly, annual growth is still the second highest after Madrid. During the same period, transactions have doubled and the number of development permits has increased 523.9 per cent, demonstrating the renewed activity in the market.
Valencia is Spain’s third largest city and although it’s just an hour and 40 minutes by high-speed train to Madrid, property prices are significantly lower than those in the capital and Barcelona, which attracts investors looking for good rental returns. Price growth has been slower than some other regions of Spain, with values rising 17.5 per cent during the past five years. Yet, transaction numbers have doubled, indicating an active market.
Malaga has undergone a transformation in recent years, the report points out, and the city is no longer just considered as a gateway to other popular places along the Costa del Sol, but a destination in its own right. The average sale price for residential properties in the city in the first quarter of 2019 was 9.9 percent higher than the average sale price in the same period a year before.
Palma, the capital of Mallorca has become a high-end destination with new Michelin starred restaurants and five-star hotels opening. But across the Balearic Islands, although the average saleprice is increasing, up 7.3 per cent over the year to the first quarter of 2019, the number of sales has slowed due to a lack of good stock. Annual residential transactions fell 6.3 per cent from the first quarter of 2018 to the second quarter of 2019. However, the city continues to attract a range of buyers. The Balearic Islands have bucked the trend somewhat with price growth of 37 per cent over the past five years, behind only Madrid and Catalonia in terms of growth.