New housing resists

new housing resists

In Spain, new housing resists in spite of the pandemic and in spite of sales being affected with regard to previous years. It is true that new housing is not sold at the same rate as other years. However, it is also true that this product continues to be sold despite the great difficulties we are living through due to the coronavirus. These are the conclusions reached by most experts after having analyzed the facts and figures regarding the sale of new housing in our country in 2020. According to information that has transcended at the beginning of last month, new housing in Spain became more expensive and rose up to 0,9% in the provincial capitals. This percentage makes it almost 2.500 euros per square metre, being the lowest increase in the last five years. Nevertheless, we must take into consideration the enormous difficulties we are currently facing at all levels (especially in the economy), due to the pandemic. It is therefore logical that as of last month of June onward, the price of new housing has only increased 0,2%, a figure that contrasts with the year 2018 when the price of new housing had the highest increase reaching up to 5%. Nonetheless, in spite of this price decline, we can say that new housing is really withstanding the onslaught of the coronavirus much better than other real estate products. Indeed, we can give as an example the situation of tourist lodgings, an issue which we have already analyzed in this blog.

New housing resists

NEW HOUSING IN PANDEMIC TIMES

Some months ago we wrote an article about the dilemma of new construction in Spain. In that article we said that the shortage of this product, and on top of this we have to add the irruption of the coronavirus have brought about an uncertain scenario. However, we can say that investors on housing in Spain continue to opt for this this product even if the sales have dropped. Some weeks ago, we commented on the fact that the demand for detached houses is on the rise since the irruption of the coronavirus. At present, the average Spaniard prefers to invest on new property with good qualities and plenty of space rather than on second-hand housing. This has caused that, in spite of the logical drop in prices of new housing, the situation is not as marked as could have been expected. We have already seen this decrease in provincial capitals but it is very significant that in the rest of the cities, with more than 100.000 inhabitants, the average price of new housing increased more than 1% in 2020 with regard to 2019.

New housing resists

PRICE INCREASE BY CITY

If we pay attention to cities, the first thing we observe is that the price of new housing has not fallen in any provincial capital. Palma de Mallorca has the highest price rise being 1,4%. It is closely followed by Barcelona and Madrid both with a 1,3% rise. It is interesting to point out that in Barcelona the price of new housing has reached an average of nearly 4.500 euros per square metre. There have only been three provincial capitals, Salamanca, Soria and Zamora, where the prices remain unchanged. All the rest, in varying degrees, have experienced an increase in the price of new construction housing.

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