Home prices on the Spanish coast increased by 5.7% in the last year
By Mas Property
on Tue Jul 23 2024
The three most expensive places are on Ibiza and average costs rose the most in Malaga, the Balearic Islands and Alicante. Housing in coastal areas – considering first and second homes – rose by 5.7% year-on-year in the first quarter of 2024, to €1,740/m2, compared to an average increase of 3.3% in house prices in Spain during this period, according to Tinsa.
The highest average increases in house prices (first and second homes) in coastal towns were in Malaga (+9.3%), the Balearic Islands (+8.8%) and Alicante (+7.2%). Meanwhile, the three most expensive towns on Ibiza are Sant Josep de sa Talaia (€4,191/m2), Santa Eulalia des Riu (€4,151/m2) and Ibiza (€3,656/m2).
«‘Overheating’ is only detected on Ibiza and a situation of extreme tension in prices is reported,» explains the senior consultant at Tinsa’s Research Department, Andrea de la Hoz, who warns that demand on the island is tending towards the luxury residential segment.
In addition, in the specific segment of holiday homes on the coast, the price increase was 3.9% year-on-year, up to €2,650 per square metre, which points to a tightening of prices in the primary residence market in these places.
Therefore, although the market for first and second homes on the coast has shown a higher year-on-year increase in price (5.7%), first homes continue to be more expensive per square metre (€2,650).
On the other hand, the volume of property transactions (first and second homes) in coastal towns contracted by 11.2% in 2023 compared to 2022, the year that marked the highest number of transactions in the last decade. As for new builds, they contracted by 22.9% compared to 2022.
Holiday rentals increase by 8.9%
Holiday rentals have also become more expensive in the first quarter of 2024, with an average increase of 8.9% year-on-year, according to the National Statistics Institute’s Holiday Rental Apartment Price Index (IPAP).
In real terms (excluding inflation), this year-on-year increase stands at 5.8% and reflects a clear upward trend in holiday rental prices, from 3.1% year-on-year in the first quarter of 2022 and 5.1% year-on-year in the first quarter of 2023.
Tinsa notes that almost three-quarters of the coastline report increases of between 5% and 30%, and estimates that the average increase in holiday home rental prices is close to 10%.
Source: Idealista, July 2024