The Spanish property market continues on a steady trajectory of improvement across the board, albeit with variations in value and speed from region to region, according to the latest Spanish house price index published by the National Institute of Statistics (INE).
The INE index is based on home sales inscribed in the Spanish Land Registry by autonomous region, rather than on valuations or asking prices like other less convincing indices. The latest report shows property values are increasing slowly and steadily, contrary to unattainable levels it reached very quickly pre-2007.
Property values in Spain took a significant plunge from 2007 to the end of 2013 before starting to see moderate rises in most regions from 2014 onwards. The INE illustrates how all of the Spanish autonomous regions began to follow in the same path of boom, bust, and mild recovery, though the speed of improvement differed greatly from region to region.
According to the report, the national average in annual price change was up by 6.2% over the last twelve months to the end of March, lead by Madrid up by 10.2% and Extremadura in last place, up by just 0.3% in a year. The last quarter saw rates slightly stagnate in most regions, but the overall picture remains one of reasonable and sustainable growth in regions with high demand from foreign investors.
Andalucia was hit the hardest during the recession, with among the highest house price bubble in the country. However, the region posted the smallest decline of 30% in prices between 2007 and the first quarter of 2014 and the luxury property market on the Costa del Sol is expected to exceed €400 million in value by the end of 2018.
Overall, house prices in Spain are still 24% below peak levels today. However, while prices are clearly on a rising trend in most areas, government reports signal a move away from the speculative and unsustainable rates and cycles the Spanish property market has experienced in previous years.