New home prices rose 4.3% in Q2 to record €2,930 — Idealista/news
New home prices up 4.3% year-on-year in the second quarter, reaching a record 2930 euros per square meteralthough this is the sixth consecutive quarter in which the pace of progress has slowed, according to the “Real Estate Sector Trends Report” published by Appraisal society.
In addition, the organization notes that New home prices recorded year-on-year growth of 6.4% in June 2023, and in the first half of the year it grew by 2.1% compared to the same period last year.
Director of Institutions and Large Accounts at Sociedad de Tasación Consuelo Villanuevaexplained that as far as the real estate sector is concerned, “beginning recovery” observed in terms of real estate and mortgage lending activity, driven by interest rates for new home purchases, which are “slightly more competitive than a year ago”, following the recent official announcement by the European Central Bank (ECB) to begin de-escalating rates.
However, Villanueva noted that on the supply side there is a scenario determined by shortage of new finished products insufficient to meet current demand. In this context, it indicates that the seller gains greater bargaining power over the buyer.
Catalonia (4,662 euros per square metre), Community of Madrid (4,493) and the Basque Country (3,240) record the highest price for a new home. Over the past year, all autonomous communities have seen annual growth, from 2.2% in Castile-La Mancha to 5.7% in the Balearic Islands. The second region with the highest growth was Madrid (5.2%). In contrast, other communities that registered a smaller increase are Castile and Leon Galicia, where the figure is 2.7%.
In the third quarter, the price will continue to rise.
The appraisal society expects the upward trend in the average price of new housing to continue in the coming months. Thus, by the end of the third quarter of 2024, the average price is predicted to be 2,955 euros per square meter, which would mean an annual increase of 4.1%.
In fact, the Real Estate Confidence Index calculated by the Appraisal Society stood at 52 points out of 100 at the end of the second quarter of 2024, positioning itself above the balance point (50) for the first time since September 2022 and thus confirming the restoration of optimism on the part of the real estate sector. In particular, the data recorded at the end of June represent an increase of 2.9 points compared to the first quarter and 4.4 points compared to the previous year.
This marks the second consecutive quarter of growth and breaks the negative trend of the past year and a half, a period in which the European Central Bank (ECB) has pursued restrictive monetary policy as a tool to combat strong inflationary pressures in Europe.
Likewise, the Appraisal Society publishes the Affordability Index, which determines the balance between the average price of housing and the corresponding credit capacity for its acquisition, taking into account the average income of working citizens. This index has been growing for the second quarter in a row to 78 points at the end of June, with a balance point of 100 points.
The cost of building a house is half the selling price.
Finally, The cost of construction of a new building reached 1310 euros. per square meter based on the results of the first half of the year after registering quarterly growth of 3.1% and annual growth of 9.1%, according to calculations by the Appraisal Society.
This is obtained by dividing the contract budget for controlled developments by the built surface above ground. The above-ground construction ratio reached 1,194 euros per square meter, and the underground construction ratio reached 391 euros per meter.