House prices in Spain rose by 3.3% in May compared to the previous year, with an increase of 0.5% compared to April, but with a particular impact in the island areas, where house prices soared by 8% in the fifth month of the year in year-on-year terms and are only 0.1% below the peak reached during the housing bubble in March 2008, according to Tinsa data.
However, the director of Tinsa's Research Department, Cristina Arias, assured that prices in large cities, province capitals and metropolitan areas in May, despite having registered a slight boost, continue to stabilise, as do those in tourist areas, which continue to lead growth, although they show slightly more moderate growth compared to previous months.
Compared to April, the "Mediterranean coast" and "Islands" slowed down, although they continued to register significant monthly increases of 0.7% and 0.5%, respectively, while there was a slight increase in "Large cities and province capitals" (+0.4%) and a more forceful increase in inland towns (+1%), which in both cases was neutralised by the slight falls accumulated since December. Metropolitan areas remained stable (+0.1% monthly).
In year-on-year terms, prices in the areas with the highest tourism demand (islands and coast) increased by 8% and 6.5%, respectively, although they moderated concerning those recorded the previous month. The "Province capitals and large cities" have a year-on-year rate of change below the average (+2.2%), while "Metropolitan areas and other towns" are growing in line with the average (+3.2%).
This price increase is explained, according to Arias, by the positive evolution of employment in the first months of the year and a solid demand, which has continued to contribute to the maintenance of property transactions, which in conjunction with the shortage of supply in employment centres and tourist areas, has kept prices up.
The average value of new and used housing in Spain is 17.8% below the 2007-2008 peak, according to Tinsa valuations.
The island territories are close to the highs of the real estate bubble era, being only 0.1% below the March 2008 reference, while the "Province capitals and large cities" are the second group closest to the boom reference (-14.1%).
Moreover, the General Index has advanced by 39.7% since the minimum recorded in August 2015 after the financial crisis, with the "Islands" standing out as the group that has increased the most in value (+47.1%), ahead of the "Province capitals and large cities" (+46.8%) and a long way behind the 24.1% increase in the price of housing in the smaller inland towns.
