The reason explaining the rapid rise in housing prices

Housing continues without respite. Resale properties in Madrid had an average price in January 2024 3854 euros per square meter. This figure increased by 2.18% compared to December 2023 and topped the ranking of the highest national growth rates. Year on year growth was 16.05%, again leading the growth in Spain.

According to the monthly sales price report on Apartments.com, Madrid is the second most expensive autonomous region after the Balearic Islands (4,181 euros/m²). Referring to secondary housing in Spain, in January 2024 an average price of 1,744 euros per square meter was recorded, showing a monthly increase of 1.91%. From year to year, the recorded figure increased by 8.96%.

In accordance with Ferran Font, director of Estudios de piso.com, “there is still little supply and high demand, not only national but also foreign, which exacerbates the imbalance.” This scenario, according to Font, means that “buying a home becomes more difficult, especially for certain groups, and we are faced with a challenge that the sector must respond to.”

“Little built”

The expert admits that “there has been little construction going on for several years, which is especially noticeable in the area of ​​public housing, since we are far from what would really be needed.” Font assures that “in markets More dynamically, where prices have given no respite, growth will continue, albeit with less intensity,” adding that “sellers will have to enter into negotiations.”

According to a representative of the real estate portal, “Bank financing influences decision-making in the real estate sector because mortgage attractiveness makes it easier to take the step towards purchasing.

Font refers to the changes that the mortgage market has gone through in recent years, noting that “the problem is not how much more loans have become expensive, but that they have done so very quickly, resulting in families “without the ability to react and adjust your income according to your monthly mortgage debt.”

In this sense, and also in light of the current stability of interest rates, the expert notes that “the beginning of inflation control is good news because European Central Bank “The pressure will start to ease.”

If you go to the most expensive regions in January 2024 to buy an apartment, they will also happen again. Balearic Islands (4,181 euro/m²) and Madrid (3854 euros/m²), followed by the Basque Country (3109 euros/m²), Catalonia (2729 euros/m²) and the Canary Islands (2095 euros/m²), while the cheapest were Extremadura (819 euros/m²), Castile- La Mancha (884 euros/m²), Castile and Leon (1,231 euros/m²), Murcia (1,246 euros/m²) and Galicia (1,372 euros/m²).