Continuing the negative trend already observed in 2020, when this type of asset depreciated by 3.7%, housing prices could fall 5% in 2021. On the other hand, a certain recovery in the volume of sales and purchases is expected this year, with up to 480,000 transactions compared to 450,000 last year; in 2019, almost 570,000 property sales and purchases were recorded.
Spain housing prices
Indicators for the real estate market show a significant recovery in activity in the sector, following the standstill during the state of alarm. On the demand side, home sales recovered well in July and increased by 20% month-on-month, although in cumulative terms for the year to date there is still a year-on-year decline of 25.8%. On the supply side, the construction sector has also quickly restarted its activity. In August, cement consumption was only 2.1% below the level of August last year, with a notable recovery from the 50% fall registered in April.
The average price of housing in Spain in 2019 increased by 3.6% last year. Only in December it experienced an increase of + 1.2%, according to the real estate valuation company Tinsa. The Mediterranean coast accumulates three consecutive months of price falls.
Caixabank Research | The Spanish housing sector is entering a more mature phase in the cycle, characterised by a weakening in growth in demand and prices. The factors which support the expansion of the housing market (creation of employment, favourable financial conditions and elevated external demand) continue evolving positively but are losing dynamism.
Housing prices have grown 16% since end-2014, according to the Bank of Spain. This is after a decline of 37% in nominal terms (45% in real terms) since their peak at end-2007.