Spanish house prices are on the increase, says Bank of Spain

If there is a time to jump into Sotogrande property, that moment may be now. This much is made clear by recent news headlines suggesting that house prices in Spain are on the rise once again amid many Western economies’ continuing recovery from the COVID-19 pandemic.

The Spanish News Today website, for example, has recently reported a warning by the Bank of Spain that residential property values in the country are seeing increases that are likely to last into 2022.

A range of factors is helping to drive up property values

While the return of a certain level of ‘normality’ after the earlier difficult stages of the coronavirus crisis is likely to be one factor in the escalating prices of properties in Spain, it is probably not the sole cause. Many experts have noted, for instance, that a global supply shortage is playing a big part in the higher costs of labour and construction materials.

It has been observed that the situation in Spain is slightly more stable than elsewhere in Europe; however, if building costs continue their upward climb, then this will directly impact on the housing market.

What do the latest property market statistics say?

According to the most recent Financial Stability Report, the Spanish real estate market saw a strong resurgence during 2021’s first eight months, going up by nearly 14% compared to the previous year.

The Bank of Spain said that this recovery was partly attributable to the improving state of the economy after the worst of the COVID-19 crisis, but also to investments that were planned for 2020, but postponed to this year. It is also thought that changing buyer preferences have played a role, with greater numbers of families now preferring new constructions.

Demand easily outstripping supply fuelled upward pressure on Spanish house prices, which went up on a year-on-year basis by 3.3% in the second quarter of 2021. The cost of new-build properties soared by 6%, but even second-hand homes recorded a 2.9% rise in their prices.

Furthermore, the bank confirmed that the sustained rise in house prices was being accompanied by more expensive home loans, a mortgage for a new home now being about 40% higher than it was during the equivalent period of 2019.

Contact us now for advice and assistance with making your move

Not everyone takes an interest in Sotogrande property for the same reasons – some are drawn to it largely for lifestyle reasons, while others are attracted by the investment opportunity it can represent. However, everyone involved in the market is likely to appreciate a professional, friendly and receptive service from their chosen estate agent.