Housing prices increase in the Canary Islands by 4.2% year-on-year

Housing prices increase in the Canary Islands by 4.2% year-on-year

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The average price of new and used housing as a whole increased by 1.7% half-yearly and 3.5% year-on-year in March, up to 1,868 euros per square meter, while in the Canary Islands it grew 4.2 percent year-on-year, according to the Real Estate Sector Trends Report from Sociedad de Tasación.

In December 2023, the average price stood at 1,852 euros per square meter, after an annual increase of 3.6% and a semi-annual increase of 1.8%. Thus, the Appraisal Society foresees a stabilization of prices, up to 1,883 euros per square meter by June 2024, which would mean an annual increase of 3.5% and a semi-annual increase of 1.7%.

By autonomous communitiesthe five regions where housing rose the most were the Balearic Islands (6.2%), the Valencian Community (4.3%), Andalusia (4.3%), Canary Islands (4.2%) and Community of Madrid (4.2%). On the other hand, those that registered the lowest growth were Castilla y León and Extremadura, both with 2%, and the autonomous city of Ceuta, which registered an annual growth of 1.6%.

Per square meter, the Community of Madrid (2,964 euros per square meter) has registered the highest average price nationwide, above Catalonia (2,575 euros per square meter) and the Basque Country (2,518 euros per square meter).

On the contraryExtremadura (952 euros per square meter), the only one that remains below 1,000 euros per square meter, and Castilla La Mancha (1,055 euros per square meter) present the lowest average units.

Regarding the provinces, Madrid has registered the highest average price (2,964 euros per square meter), thus surpassing Barcelona for the second consecutive year (2,914 euros per square meter), followed by Guipúzcoa (2,814 euros per square meter), the Balearic Islands ( 2,570 euros per square meter) and Vizcaya (2,438 euros per square meter).

At the other endCiudad Real (924 euros per square meter), Cáceres (948 euros per square meter) and Badajoz (953 euros per square meter) have recorded the lowest prices.

Furthermore, all provinces experienced increases in the price of new and used housing in the last year, especially in Malaga (6.3%) and the Balearic Islands (6.2%). On the opposite side, Soria (0.5%), Ciudad Real (0.5%) and Zamora (0.6%) registered the smallest increases.

Price growth “continues to slow”after four consecutive quarters of slight slowdowns in interannual growth rates, said the director of Institutions and Large Accounts of the Appraisal Society, Consuelo Villanueva.

More than 7 years of salary to buy a home

The Real Estate Effort Index prepared by the Appraisal Society, whose indicator measures the number of years of full salary that a citizen needs to allocate to the purchase of an average-type home, has reached 7.6 years of full salary at the end of the first quarter of 2024.

A figure that reflects a decrease of 1.3% in year-on-year terms and quarterly stability (-0.1%). By autonomous community, six of the 17 register increases compared to the same period last year, with the most pronounced increases being those of the Balearic Islands (10%) and La Rioja (10%). The rest of the communities reflect slight decreases in their effort indices.

In general, the gap varies between the five years of full salary that a citizen of Murcia must spend on the purchase of a home and the 9.3 years of Madrid. The Balearic Islands stand out, where citizens must allocate 19.9 years of their salary to purchasing a home, the highest figure in the historical series.

The Real Estate Effort Index is constructed from the quotient between the value of new and used housing marketand the average gross annual income.

On the other hand, the Real Estate Confidence Index of the Appraisal Society has experienced a year-on-year increase of 2.6% and quarterly increase of 4.5% until reaching 49.1 points at the end of the first quarter of 2024. In an interannual rate, most of the autonomies have registered increases in their indices, which range between 1.4% in the Basque Country and 7.5% in Asturias. .

The Appraisal Society’s Accessibility Index, which determines the balance between the average price of housing and the appropriate debt capacity for its acquisition, has increased to 75 pointsa figure that marks the break-even point, after an increase of two points compared to the previous quarter.

In percentage termsthis is an increase of 2.7% compared to the fourth quarter of 2023. Despite this increase, the figure remains 8.5% lower than a year ago.

Despite the increase in prices year-on-year, «optimism in the real estate sector has increased» during the first quarter of 2024 in the expectation that the European Central Bank (ECB) can begin a relaxation of monetary policy in the second half of the year, says Villanueva.

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