5 provinces account for 43% of the new housing supply in Spain
Historically, Spaniards have preferred to own property, though buying a home is not an easy task for most. Prices are approaching historic levels and are expected to continue rising, according to expert forecasts.
Growth has been more restrained in the second quarter of the year, as indicated by the real estate statistics published by the College of Registrars. During this period, there was a quarterly increase of 2.9%, reaching 2,057 euros per square meter. This rise is mainly due to the increase in the price of second-hand homes (3.8%), while new housing saw a 0.3% growth. This marks the fourth consecutive quarter of price increases.
At the end of the second quarter, the average annual price also surpassed 2,000 euros per square meter, reaching 2,004 euros, the highest level since mid-2008. For new housing, the average price stood at 2,194 euros, setting a new historical record. In the case of second-hand housing, at 1,958 euros per square meter, prices reached their highest levels since late 2008.
According to the forecasts of Sociedad de Tasación for the residential market, the average price of new flats will hit another peak by the end of this year, reaching 2,979 euros per square meter, representing a 3.8% increase compared to the previous year.
Insufficient supply
The appraisers confirm that new construction is mainly concentrated in high-demand locations, meaning five provinces (Madrid, Barcelona, Málaga, Seville, and Alicante) account for 43% of the housing supply coming onto the market. When adding other provinces like Valencia, the Balearic Islands, Navarre, Murcia, and Cádiz, this figure rises to 59% of all new construction in Spain, with the bulk of this segment concentrated in just 10 provinces.
Although these markets show greater dynamism, the supply remains insufficient to meet a growing demand, far exceeding the volume of finished products entering the market. This imbalance leads to increased pressure on new construction prices, as noted by Sociedad de Tasación.
Challenges and opportunities
In the current context, the new housing market in Spain faces several challenges. High construction costs, complex urban planning regulations, and the scarcity of land in urban areas are obstacles that developers must overcome. Furthermore, global economic uncertainty could affect demand in the coming years.
However, the outlook remains positive. Digitalization, innovation in construction, and continued interest from both domestic and foreign buyers indicate that new housing will continue to be a cornerstone of the real estate market in Spain.