Catalonia, among the communities where buying housing becomes less expensive

BarcelonaThe sale price of housing in Catalonia during the first quarter has risen by 10.5% compared to the same period last year, below the state average of 12.9%, according to the Housing Price Index (IPV, from its Spanish name) published by the INE this Monday.

In fact, in the comparison between autonomous communities, Catalonia is the second in which prices have remained most stable, only behind the Basque Country (10.3%) and at the same level as Navarra (10.5%). On the other hand, where the sale values have increased the most compared to a year ago are in Aragon and Murcia (15.6%); in Castilla y León and Ceuta (14.9%); and in Asturias, the Valencian Country, and La Rioja (14.3%).

According to the manager of the Chamber of Urban Property of Barcelona, Òscar Gorgues, Catalonia is "reaching the meseta effect" (that is, a certain stabilization), after a period of rising prices. He opines that, although "demand will continue to rise," there will be "less solvent" demand each time, or in other words, that can afford the purchase amounts.

The Ministry of Housing and Urban Agenda estimates the average price per square meter at 2,748 euros during the first three months of this year, based on official appraisals. Catalonia is located at the high end of the ranking, only behind the Community of Madrid, where the price is 4,047.5 euros; the Balearic Islands (3,885.6 euros) and the Basque Country (3,036.3 euros).

Less buying for investment

Gorgues disconnects the evolution of prices from rent regulation, and believes that "possibly the legislation affecting large holders has had more influence." He assures that "investment demand has fallen in Catalonia," and that this "may have helped" to relax prices.

Despite the upward trend and the supply problem, Gorgues points out that, unlike in the years before the property bubble burst, "the financial system is very sound". He argues that "there is solid, non-speculative buying, with a good amount of savings", determined by the amount of mortgages compared to the purchase price of homes.

Dominance of the second-hand market

Regarding the type of housing, in Catalonia, second-hand housing has become 10.8% more expensive compared to last year, more than newly built housing, which has increased by 8%. Gorgues points out that this is a consequence of the lack of supply. "The market that is fundamentally moving is the second-hand market," he explains. In contrast, new construction currently being mortgaged "was sold some time ago, because it is done off-plan".

On a quarterly basis, sales and purchase values have risen by 3.3%, driven by new construction (4.8%). If we look at how prices have changed in the first three months of the year, Catalonia continues to be below the state average (3.5%) but is no longer among the territories with the lowest increase. The price advance in our region has eased compared to the last three months of last year, when they soared by 10.9%.

The Spanish government also estimates price variations compared to official valuations. Its statistics are higher than those of the INE, which are based on the final transaction value, but they follow the same trend.

The Ministry of Housing concludes that prices in the first quarter at the state level are 13.9% above the same period last year. In the case of Catalonia, it believes that the increase has been 12% – and not 10.5%, as the statistical body states – but it remains in the low range of the bracket.