New housing prices rise at the height of the pandemic
"The residential sector and in particular the new construction resists, at least for the moment, the blow of the crisis of the coronavirus", informs Carlos Lospitao for idealista.
In a recent article for this real estate portal, it is reported that "new housing not only maintains the type in the earthquake of the pandemic, but records the best numbers of the last decade in terms of price".
The data, provided by the Appraisal Society, are conclusive: "the price of new housing in Spain stood at 2,472 euros/m2 at the end of June, the highest figure since 2010". A figure very close to the historical maximum of 2007 (2,905 euros/m2).
MODERATE BUT STABLE GROWTH
"Since the end of 2014, the price of new housing has not stopped increasing, although from June last year until June 2020, it has only increased by 72 euros/m2", they report in idealista.
Thus, "the current prices are closer to that record than to the minimums of the previous crisis", they continue.
Therefore, the question that must be asked is...
WHY DOES COVID19 NOT AFFECT THE PRICE?
In the market for the purchase and sale of newly built properties, for the time being, price falls are ruled out. An interesting fact considering the health crisis in which the whole world is immersed.
The experts also emphasize that "the segment of the population most affected by the ERTE derived from the coronavirus was already excluded from buying a new home," in the words of Juan Fernandez-Aceytuno, of the Valuation Society.
The most important factor, however, is the fact that residential housing has once again become a safe value for their investments, or in other words, a "refuge value" given the uncertain future in other markets.
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THE YEAR-ON-YEAR INCREASE IS 2.7%
The study conducted by the Valuation Society also provides valuable information regarding the year-on-year change in the price of new housing.
The average in Spain was 1,681 euros/m2 at the end of June 2020, which means an increase of 2.7% over the same month in 2019.
The price variation in the first half of 2020 was 1.1%.
RENTAL PROFITABILITY CONTINUES TO INCREASE
According to the report, the average gross return on rent in Spain stood at 8% (progress data for the third quarter of 2020).
This represents an increase of 4.9% compared to the data recorded during the same period of the previous year.
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Read the original post at idealista or download the full PDF report (in Spanish) via this link.
