According to a recent report by the Instituto de Práctica Empresarial (IPE), Spanish property prices are set to increase 6.1% during 2018, the fifth consecutive year of increases.
The 25th edition of IPE’s Property Outlook Report forecasts the Madrid region to witness the highest growth with 10.8% increases, closely followed by Castilla y Leon, the Canaries and Andalucía, home of the Costa del Sol. Political tensions in Catalonia, traditionally the market leader, are expected to slow growth in the region to 4.9%.
Spanish property prices plunged by more than 30% during the market crash between 2008 and 2013, however according to IPE, they will have recovered over 21% by the end of 2018 driven by continued economic recovery and high demand amongst foreign investors for Spanish property.
Although prices are forecast to grow across the whole of Spain during 2018, the disparity between different regions is expected to continue. Whilst Madrid, Castilla y Leon, the Canaries and Andalucía are expected to lead the way with growth of 10.8%, 8%, 7.7% and 7.1% respectively, at the other end of the scale, La Rioja and the Basque Country are only predicted to record growth of 0.9%. The forecast of 4.9% growth for Catalonia, which normally leads the market, could change depending on the political situation.
Although still a long way off the peak of 2007, if prices grow as predicted they will reach those last witnessed in early 2005 when the Spanish property boom was thriving.