House prices break the 2007 ceiling and reach a record in Spain

BarcelonaThe price of free housing soared by an average of 8.4% in 2024 in Spain, the biggest increase since 2007, when prices grew by 9.8%. With this increase, housing has registered 11 consecutive years of price increases and in 2024 it will reach its historical record, finally breaking the ceiling of 2007, the last year before the bursting of the real estate bubble of the 2000s and the first with records by the INE.

These data from the housing price index (IPV, in its acronym in Spanish), prepared by the National Institute of Statistics (INE), are different in the case of Catalonia, which neither registers the strongest rebound since 2007 - free housing became more expensive by 7.4% in 2020,2 compared to 2018 - nor has it broken the ceiling of 17 years ago.

The data thus show two markets that are moving at a similar pace, with housing prices rising higher than those recorded in the last six years, but with a basic difference: while in Spain prices have already surpassed the highs of the real estate bubble –They already started doing it in the first quarter of 2024–, in Catalonia this overtaking historical has not occurred. This is explained because during the boom Since 2007, housing prices in the Principality have reached much higher levels than in Spain as a whole.

Can we talk about a bubble?

However, if the price increase continues at its current pace, Catalonia will beat the record prices of 2007 in the first quarter of 2025, especially taking into account the easing of credit that is taking place due to the drop in interest rates, which are already at their lowest level Since February 2023, this trend legitimately raises the question: does exceeding the prices of the real estate bubble mean that another one can be created? For the manager of the Barcelona Chamber of Urban Property, Òscar Gorgues, absolutely not.

"We are not facing a bubble, buyers now access housing with a solvent credit situation, now the banks are much more cautious. Speculative buying in the market is a minority," says Gorgues in statements to ARA. This expert sees the current upward trend in prices as a consequence of the lack of supply: "There are fewer apartments than are needed and the price increases with a solvent and constant demand. We are facing a hyper-tensioned market; therefore, it is exactly the opposite of what happened during the bubble, when people bought to speculate."

Unstoppable price increases

The 8.4% growth rate recorded last year in Spain is more than double the 4% of the previous year and is one percentage point higher than that of 2022, which until now was the highest increase since 2007. In the case of newly built housing, the increase in 2024 was even higher, with an average growth of 10.9% in 2023. As for second-hand flats and houses, they also registered the second highest increase (again below 2007), with 8.2%, almost five points more than the previous year. As for the fourth quarter of the year, prices rose by 11.3% compared to the same period in 2023, 3.2 points more than the rate in the third quarter.

For Gorgues, this increase in prices could continue even further, because prices – which hit rock bottom in 2013 – have recovered and in 2024 were 6.72% above those of 2007. less has risen. New construction has risen more due to scarcity," he adds.

In Catalonia, the 7.4% increase in prices exceeds the rise in 2007 but is below the 9.6% and 8.8% recorded in 2017 and 2018. In the case of new-build housing, the increase in 2024 was 9.6%; last year it registered an increase of 7.1%, below the years 2017 and 2018 but above 2007, as in the case of the general price. As regards the fourth quarter of the year, prices increased by 10.4% compared to the last three months of the previous year, 3.6 points more than the rate of the third quarter.