House prices rose 7.4% in 2022, their biggest increase since 2007
In a year marked by inflation, the sharp increase in the price of construction materials and the first rate hikes by the European Central Bank in more than a decade, The price of housing rose on average in Spain by 7.4%, its highest increase since before the brick crisis broke out (2007) and accumulates, thus, nine consecutive years of progress. The data made public this Thursday by the National Institute of Statistics (INE) reveal that new housing became more expensive in the last year by 7.9%, the highest rate also since 2007, while second-hand properties did so by 7.3% on average, its sharpest rise in the last 15 years.
Despite these figures, between October and December the effects of the slowdown in the economy (which advanced by barely 0.2% for the second consecutive quarter) and the higher cost of financing on the real estate market can be seen. Thus, despite the fact that the price of housing increased by 5.5% on average in relation to the same quarter of the previous year, it is 0.8% cheaper compared to the third quarter. This 5.5% year-on-year rise is the lowest since mid-2021, still marked by the effects of the Covid pandemic.
House prices present negative quarterly rates between October and December in all the autonomous communities, except in Navarra (0.7%), the Canary Islands (0.5%) and Cantabria (0.3%). The greatest decreases occurred in La Rioja, Castilla La-Mancha and the Basque Country, with drops of 1.9 points in the first, and 1.6 in the last two.
Notaries observe a drop in sales in January
The cooling of the brick can also be seen in the sales data for the month of January, which has also been released by the General Council of Notaries. Operations fell by 7.3% compared to the same month a year ago, given that they fell in fourteen autonomies with the Balearic Islands (-27.8%) and the Basque Country (-18.5%) in the lead. On the opposite side were regions such as Extremadura, where sales increased by 5%, and the Valencian Community, where they rose by 4.9).
According to the figures of operations available to notaries, the price per square meter fell by 1.7% in Spain in the first month of this year in year-on-year terms, with Navarra (-21.7%) and the Balearic Islands (-20.7%) as the territories most affected by this setback. On the other hand, housing continued to rise sharply in La Rioja (35.2%) and Madrid (8.9%).
The increase in the cost of credit due to the increase in interest rates and the consequent rise in the Euribor (the indicator to which the vast majority of variable mortgages in Spain refer) has caused a drop of 16.1% year-on-year in the granting of mortgages in January. The decrease can be seen in all Autonomous Communities, notably the decreases in Navarra (-27.4%), Castilla y León (-24.6%) and the Basque Country (-22.7%).