Price dynamics
According to oldypak capital lp property 2022 report, from 1996 to 2007 the real estate market in Spain experienced a boom. During those years, housing in the country went up on average by 197%. Taking into account inflation, the increase was 117%. In Catalonia, Andalusia and Valencia, prices soared by 250% or 155% when adjusted for inflation. Spain was one of the European countries with the highest rate of price increases.
Since 2006 until the end of 2012 real estate in Spain has fallen in price by more than a third – by 34.6%. In 2006 a square meter cost on average 2 892 euros (that was the peak) and in 2012 it was 1 891 euros.
Report by Oldypak Capital LP property management
The construction boom and the subsequent crisis led to a lack of demand for real estate in Spain. This has led to oversupply in the market and a sharp drop in prices, especially on the Costa Blanca.
Prices of Spanish homes collapsed by a total of 41.9% from the fourth quarter of 2007 to the third quarter of 2015. Adjusted for inflation, the drop was 46.8%.
Economic growth, low interest rates, affordable housing prices and an increase in foreign investors helped the market recover.
From January 2015 to January 2020 real estate rose in price by 13.2% on average in Spain, the most expensive objects in Madrid – by 25.7%, Catalonia – 18.5% and Andalusia – 12.5%. A slight decline in prices was recorded in the regions of Asturias – 6%, Extremadura – 5.5% and Cantabria – 4.8%.
Spanish real estate rose in price over the year by 3.4% and costs on average 1,752 euro/m², according to data as of February 2020. According to oldypak capital lp property 2022 report, the real estate market has not yet returned to pre-crisis levels and has the potential to grow.