The price of housing in Spain rises 10% in February, the highest increase in 17 years

FILE PHOTO: A woman walks past a real estate office in El Masnou, Catalonia, Spain, May 19, 2020. REUTERS/Albert Gea

(Reuters) – The average price of second-hand housing in Spain rose 9.9% year-on-year in February, the biggest increase since August 2006, as many buyers tried to anticipate further interest rate hikes in the eurozone .

According to a report from the real estate portal Fotocasa, the monthly variation in the price of second-hand housing —a very representative indicator of the buying and selling market in general— was 1.2% per month, placing its price at 2,086 euros per square meter in February. .

“(…) represents the greatest acceleration in the last 17 years, since the Fotocasa Index has records. This rise places us at levels similar to 2006, in the warm-up period prior to the real estate bubble”, María Matos, director of Studies and spokesperson for Fotocasa.

“This acceleration is caused by the change in monetary policy due to the rise in interest rates by the ECB, which has caused the demand for purchases to resurface and put pressure on prices due to the shortage of supply,” they added.

The ECB has raised rates by 300 basis points since July and has promised another large hike in March, its fastest pace of monetary tightening to date, amid a meteoric rise in inflation against the backdrop of the Ukraine war and the economic opening after the COVID-19 pandemic.

Due to this temporary nature of the increase in housing prices, the real estate portal warns that the trend will not last.

“From Fotocasa we consider that these increases are temporary, that it is a matter of time before the price begins to show signs of moderation and that it returns to a stable path, taking into account the rate of increase in mortgage prices caused by the Euribor,” said Matos.

(Reporting by Tomás Cobos)

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