The housing market: An uneven recovery across regions

The housing market: An uneven recovery across regions

Fecha: febrero 2020

Fernando Gómez Díaz

Vivienda, Análisis regional, Análisis local, Precios, Segmentación, Mercado inmobiliario

Spanish and International Economic & Financial Otlook, SEFO, V. 9 N.º 1

House prices in Spain have recovered significantly over the past years and currently stand at a little over 80% of pre-crisis peak levels. Nevertheless, noteworthy variation exists across Spain’s regions. While nine provinces have outperformed the national average, 22 of Spain’s provinces have achieved a price recovery equivalent to just 65% of peak levels. Furthermore, the rebound in transaction volumes has lagged the recovery in prices. Volumes currently stand at just over 60% of peak levels but present considerable differences across provinces. It is worth highlighting the weak new housing construction figures. These statistics suggest Spain’s housing market is still digesting the legacy stock of unsold housing from the previous construction boom. Lastly, housing affordability has improved in all regions, even those in which the price recovery has been most dynamic, putting prices at close to pre-crisis levels. Looking forward, the data suggest the housing market is likely to experience a soft landing rather than another crash. That said, the varying degrees of recovery draw attention to important structural dynamics, which could pose future challenges.

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