Sat. Feb 23rd, 2019

The price of the used house gives an acceleration and rises to pre-crisis rhythm

El precio de la vivienda usada da un acelerón y sube a ritmo precrisis

The rise of the price of the living place gains strength, especially in the second-hand market. According to the data published yesterday by the Statistics National Institute (INE), between July and September, buying a home costs 7.2% more than in the same period of the previous year. In the case of used properties, the acceleration is even greater - of 7.3% -, the largest increase since before the outbreak of the economic crisis, in 2007.

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The value of homes -new and used- has not stopped growing in the last four years. An upward trend that also occurs when only the evolution of the purchase value registered in the notaries for second-hand properties is taken into account.

Catalonia and Madrid lead the progressive increase in the price in the real estate market, after the collapse due to the recession. In the third quarter of this year, the price of housing in Catalonia increased by 9.1% compared to twelve months earlier (the rise was 9.2% among homes sold second hand). As for Madrid, the year-on-year rise was 11.8% among the homes used (10.9%, in total). Since the beginning of last year, real estate prices in Madrid are growing at double digits. The increase in the price of the last months of the housing stock for sale in both territories adds to the pressure that renting is also experiencing, both in Barcelona and Madrid and in their respective metropolitan areas. A situation that generally complicates access to housing and puts in check, for important social groups, especially young people and workers with the lowest salaries, decisions such as emancipation, partner or have a child.

The highest price is in Madrid (11.8%) and Catalonia (9.2%)

The statistics of the INE, based on 95% of the sales transactions registered in a quarter, also highlights the increase experienced in the Balearic Islands (the interannual rate reaches 7%). In addition, with respect to the previous quarter it has advanced 3.7 percentage points, with a more marked increase than Madrid (3.3%), Murcia (2.5%), Asturias (2.4%), Catalonia (2.3%) %), as well as the state average, located at 2.2%.

With regard to new housing -with a fairly small weight on the set of purchases that are made-, the rise of the third quarter was on the same line, although it was somewhat softer. In this way, the prices of the properties to be released increased by 6.1%, in comparison with the same period of 2017.

It remains to be seen to what extent the housing will continue to cost and for how long the upward trend will continue. A few weeks ago, the taxation company Tinsa estimated for 2019 "a sustained growth" of the average value of housing between 5% and 7%. In any case, they pointed out that, "outside of the main metropolitan areas and coastal and island territories, prices remain stable at minimum levels, perhaps showing slight positive variations. Even within municipalities, the difference between districts or neighborhoods is often substantial. "

The index of housing prices designed by the INE accumulates an average rise of 20 points compared to the reference level of 2015. For Madrid, the increase since then is 36.6% and in Catalonia, 30%. On the other hand, it is minimal in communities such as Extremadura (4.7%), Castilla-La Mancha (4.9%), Asturias (7.7%) or Murcia (7.8%).

Eleven years ago, in the third quarter of 2007, the price of second-hand housing was still up 7.5%. However, the first signs of the loss of strength that would end with the bursting of the housing bubble were already coming. At the beginning of 2007, the interannual rate collected by the INE was a strong 13% and went into negative territory in just one year -the cost of the used one fell in the first quarter of 2008 and the joint index only three months later-. The prices of used housing were not positive again until 2014.

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