Housing prices accelerate their increases, immune to the drop in sales and mortgages, and have already accumulated 38 consecutive quarters of increases driven by new construction, which has become 11% more expensive compared to last year, the largest increase in 16 years.
According to data published this morning by the National Institute of Statistics (INE), housing prices have accumulated an increase of 4.5% compared to last year, a rate that is nine tenths higher than the 3.6% recorded in the previous quarter. The year-on-year increase is 3.2% in second-hand homes sold (a rate that also grows, three tenths, compared to the previous quarter) and 11.0% in new construction, which has skyrocketed compared to the previous quarter. growth of the 6% recorded at the beginning of the year.
According to María Matos, director of studies at the Fotocasa portal, the rise in prices reflects that “the demand for buying a home continues to be very strong, despite the increases in interest rates in recent months,” which in her opinion only has effect on the purchase intention of the most vulnerable families. Much of this demand is for replacement: families who already own a home and are looking to sell it to buy a better one. And 20% of those looking for housing only want new construction, which drives up prices since there are very few developments underway. Between the third and second quarter, new home prices rise 4.1%.
New apartments rose at double-digit rates in eleven of the seventeen autonomies, led by Cantabria (14.1%), Navarra (13.7%) and Aragón (12.4%). In the four major real estate markets of Spain, new construction also became sharply more expensive, highlighting Andalusia (11.9%), followed by the Valencian Community (11.7%), Madrid (11.6%) and Catalonia (10. ,2%). In both archipelagos, Balares and the Canary Islands, the increase was 11.3%.
In the last two quarters, housing prices have reversed the weakness they had shown since the outbreak of the war in Ukraine, and are rising again at rates unknown since 2021. Thus, the increase compared to the previous quarter has reached 2.5 %, compared to the increases of 2.1% registered in the second quarter, 0.6% in the first, and the decrease of 0.8% with which the last quarter of 2022 closed.
Second-hand housing prices also increase, although less strongly: 2.2% compared to the previous quarter, when they fell by 1.4% in the last quarter of 2022.
Housing prices have risen in the third quarter of 2023 in all autonomous communities, according to the INE, with the largest year-on-year increases in the Foral Community of Navarra, the Canary Islands, Cantabria and Andalusia, with increases of 7.6%, 6 .6%, 5.9% and 5.8%, respectively. For their part, Castilla-La Mancha (1.0%), Extremadura (1.1%) and La Rioja (1.9%) registered the lowest annual increases. In Catalonia the year-on-year increase was 3.8%, lower than the state average, as well as in Madrid, where it was 4.1%.
Compared to the previous quarter, prices also rose in all communities, with increases ranging from 3.1% in Navarra to 0.6% in Castilla-La Mancha.
Living in a new apartment is going to become a luxury within the reach of few families, experts acknowledge. “We do not believe that new construction will suffer moderations and even if demand continues to be so strong in the coming months we will see how the price continues to increase,” said María Matos. The increase in prices is also due to the rise in the cost of materials, the difficulties of developers in purchasing final land, the lack of qualified labor in the sector and the increase in energy prices, which has even led real estate companies to paralyze. promotions, Matos said.
