Bankia Estudios | Housing prices rose again in the third quarter, calling into question the forecasts made at the beginning of the pandemic for a sharp drop in prices as a result of the economic crisis in the wake of the health crisis. For the time being, the available data does not reflect this impact. It shows that prices are maintaining a tendency of slight deceleration, but in a positive way, sustained by the price of new housing.
Housing prices rebounded in Q3’20 (+1.1% quarter-on-quarter), after remaining practically stable in the previous quarter. They are 16% below the highs of 2007 and 35% above the lows of 2014. In year-on-year terms, the prices maintain the trend of gradual moderation that has been observed since 2018 : +1.7% in Q3’20, the lowest since Q1’15, compared to the previous +2.1% and the +5.1% recorded on average in 2019. The rebound in Q3’20 was concentrated in new home prices: +4.7% quarter-on-quarter after the one-off fall in the previous quarter (-2.2%). In year-on-year terms they rose to 7.5%, the highest rate since Q1’19. On the other hand, second hand housing prices, which are less volatile than new ones, maintained a slightly higher growth rate than the previous quarter (+0.6% vs +0.5%); but their year-on-year growth moderated to 0.8%, the lowest rate since mid-2014 (that is, when the sector began to recover).
Prices in the new housing segment have recorded an accumulated 50% growth from minimums and, after the growth in Q3’20, are around the previous maximums. Meanwhile the prices of second hand properties are 25% lower. The different adjustment is not surprising, taking into account the scarcity of new housing supply in this cycle: 85,000 homes completed in the last 12 months (up to September), compared to a pre-boom average of more than 200,000 homes per year.