According to the Bank of Spain, residential property investment is set to top 4.5% of Spain’s GDP by the end of the year. “This is similar to the average in neighbouring countries, but far below the 12% registered in 2007,” writes the bank in a recently published report.
The report reveals that house prices, which experienced a drop of 45% in real terms from their peak in Q3 2007 to their low in Q1 2014, continue to grow. They increased by 16% up to September, although there are huge discrepancies in price growth rates depending on the area. In its latest quarterly report on Spain’s economic situation, the Bank specifically highlights Madrid, Catalonia and the Balearics as the regions with the highest price growth.
When the type of property is taken into account, growth in prices for new builds has been slightly higher than for resale properties since hitting all-time lows in 2014, although the difference has been less noticeable over the last few quarters.