Gesvalt, the benchmark company in the advisory, valuation and technical actions industry, has published its Housing Report for the first quarter of 2021. The study, developed by the company’s Department of Research with its own data, highlights a 0.6% decline in housing prices compared to the same period in 2020.
In this way, the downward trend of the last three quarters is maintained, although this time the drop has moderated, falling below 1% for the first time, and is approaching the price stabilisation expected for the middle of the year. In any case, the average housing price in Spain stood at € 1,388 per sq. m, still above the forecasts made at the beginning of the pandemic, where declines of more than 3% were expected.
Gesvalt’s Housing Report for the first quarter of the year also points out that the demand continues to move towards single-family homes and city outskirts, driven by the new needs generated by the pandemic and the work-from-home boom, with less commuting to and from business centres. This is proven by the fact that, during Q1 2021, the largest YoY sale price increases in Madrid districts were seen in Moratalaz (+ 3.2%), Vicálvaro (+ 2.5%) and Moncloa (2.0%). In Barcelona, prices also rose in the boroughs of Hortá-Guinardó (+ 2.7%), Grácia (+ 2.5%) and Sarriá – Sant Gervasi (+ 2.0%). On the other hand, in Valencia these increases are sharper, especially in districts such as Poblados del Oeste, Ciutat Vella and Quatre Carreres. Finally, the Sevillian districts were prices increased the most during the last quarter were Macarena, Casco Antiguo and San Pablo – Santa Justa.
Navarra and Madrid Join the Autonomous Communities Recording Increases, while Galicia Returns to the Price Fall Group
While six autonomous communities broke the generalised decline trend in Q4 2020, housing prices have increased in seven regions in Q1 2021.
The most significant increases are seen again in Asturias (+ 2.1%) and La Rioja (+ 1.6%), while prices grew less than 1.5% in the Canary Islands, Cantabria, Madrid, Navarra and the Basque Country. On the contrary, the most significant drops have occurred in Murcia (-2.9%), Aragón (-2.1%), and Galicia (-2.0%), where prices rose in Q4 2020.
With regard to the ranking of autonomous communities with the highest prices, the Balearic Islands took the lead again after losing the top position in the previous quarter, with an average value of € 2,324 per sq. m, and overtaking Madrid, where the average value stands at € 2,267 per sq. m. Third in the ranking is the Basque Country, which this quarter reached € 2,232 per sq. m. The lower part of the ranking is headed by Extremadura, with € 841 per sq. m, followed by Castile-La Mancha (€ 857 per sq. m) and Murcia (€ 984 per sq. m), which remain the only regions seeing unit prices below € 1,000 per sq. m.
At the provincial level, the most significant price rises occurred in Lleida (+ 5.0%), Valladolid (+ 2.4%) and Huelva (+ 2.0%). On the contrary, provinces that saw the most negative variations included Córdoba and León – tied with a 5.1% drop- and Pontevedra -with a 4.5% price reduction-.
According to Gesvalt’s latest report, there are 19 provinces with a unit price less than € 1,000 per sq. m. On the other hand, the provinces with the highest prices are still Guipúzcoa, Biscay, the Balearic Islands, Madrid and Málaga, maintaining values above € 2,000 per sq. m.
As regards provincial capitals, no changes are observed in the top positions of the unit selling price ranking. San Sebastián sees a quarter-on-quarter rise, with an average of € 4,031 per sq. m. In Barcelona, prices fall down to € 3,301 per sq. m. Prices in Madrid decrease slightly, standing at € 3,027 per sq. m; while in Bilbao they rose up to € 2,478 per sq. m. Palma de Mallorca sees a slight decline, reaching a unit price of € 2,227 per sq. m. These, together with Malaga (€ 2,017 per sq. m), are the six capitals with unit values above € 2,000 per sq. m.
The ranking of municipalities with more than 50,000 inhabitants is headed by Sant Cugat del Vallés with € 3,488 per sq. m, followed by Getxo with € 3,196 per sq. m. The third position is occupied by Pozuelo de Alarcón (€ 3,029 per sq. m), followed by Majadahonda (€ 3,010 per sq. m) and Castelldefels (€ 2,917 per sq. m) in the fifth position.
Rent Drops Continue to Be More Pronounced
In general terms, during this quarter the drop in rental prices was again somewhat sharper than that observed in sale prices. Barcelona is the only province with rents above € 16 per sq. m per month, although it is already at the limit of this barrier with € 16.01 per sq. m per month. The city of Barcelona is followed in the rental price ranking by Madrid in the second position (€ 15.08 per sq. m per month), Guipúzcoa (€ 14.58 per sq. m per month) and the Balearic Islands (€ 12.97 per sq. m per month). On the other hand, provinces with the least tendency to rent -and consequently lower rental prices- include Cuenca, Jaén, Teruel, Cáceres, Zamora and Ciudad Real; all of them with rents below € 5 per sq. m per month.
By municipality, Barcelona and Madrid remain the ones with rents above € 16 per sq. m per month, although San Sebastián is approaching with € 15.5 per sq. m per month on average. In these cities, the average rental price of a 90 sq. m house is around € 1,600. In contrast, the municipalities with more than 50,000 inhabitants with the lowest housing rents are Elda, Alcoy and Linares, with unit prices below € 4.5 per sq. m per month.
Loss of Year-On-Year Purchasing Power to Buy a Home
In the latest data published at the end of Q4 2020, the theoretical effort required for families to buy a home decreased by 4 tenths compared to the previous quarter, standing at 30.8%, which accounts for a 0.3% YoY increase. That is to say, the loss of purchasing power has caused that -in one year and at the national level- the number of salary years that a middle-income family would need to allocate for the purchase of a medium-type home increases by three tenths, this figure being 7.3 years.