Gesvalt has published its Housing Report for the fourth and final quarter of 2020. The study, carried out using the company's own data by its Research Department, highlights a 1.1% drop in house prices compared to the same period in 2019. These data reflect how the downward trend that we observed during the previous two quarters, which marked the end of the growth cycle experienced in recent years by the real estate sector in our country, has continued. However, it is important to note that this contraction in residential sales prices, which stands at an average of €1,391/m² in the country, is lower than the forecasts made in the middle of the year, which predicted a decrease in house prices of between 31Q2013Q and 41Q2013Q.
The latest report by Gesvalt once again highlights the change in trends in home buying and selling, as a result of the new needs and demands caused by the pandemic. In the current context, there is a tendency for demand to shift towards the peripheral areas of the large capital cities, as new preferences have arisen as a result of the pandemic. On the one hand, as a result of the confinement, the search for larger homes has increased, leading to a sharp rise in the volume of sales of single-family homes, which accounted for more than 20% of all transactions in the third quarter of the year. On the other hand, the possibility of teleworking has reduced the number of commutes, thus reducing the importance of the proximity of housing to business centres.
Break in trend and price increases in several communities
Breaking the trend of generalised contractions during the previous two quarters, we see that six Autonomous Communities have increased their average price during the fourth quarter with respect to the same period of the previous year. The most notable increases are observed in Asturias (+1.81 QoQ) and La Rioja (+1.01 QoQ). On the other hand, Galicia, the Canary Islands, the Basque Country and Cantabria have registered increases of less than 11 QoQTP3T in their selling prices. On the other hand, the most significant decreases were in the Balearic Islands (-6.6%), Aragon (-2.4%), and the two Castiles, both with a fall of 1.6%.
At the top of the table there have also been changes over the last quarter. The Community of Madrid is at the top of the table, with an average value of 2,218 €/m², thus overtaking the Balearic Islands (2,212 €/m²) in the ranking of prices by autonomous community. The third position is occupied by the Basque Country, which recorded a value of 2,197 €/m² this quarter. On the other hand, the lower part of the ranking is headed by Extremadura, with a value of 839 €/m², followed by Castilla la Mancha with 854 €/m², Murcia with 993 €/m² and Castilla y León with 995 €/m²; these being the only regions with prices below 1,000 €/m².
On a provincial level, the increases in Soria (+5.0%), Cáceres (+4.1%), Málaga (+2.0%) and Orense (+1.9%) stand out. Likewise, the provinces with the most negative variations were Palencia, with a drop of 6.0% and León, which reduced its prices by 5.4%.
In terms of provincial capitals, there have been no changes in the top positions of the sales price ranking. San Sebastian recorded a slight increase compared to the previous quarter, with an average of 3,887 €/m², while Barcelona also grew to 3,266 €/m². Prices in Madrid, meanwhile, fell slightly, dropping to 3,046 €/m²; a similar situation to that experienced in Bilbao, which stands at 2,430 €/m². Likewise, Palma de Mallorca recorded a slight increase, which places its unit price at 2,229 €/m² and closes, together with A Coruña (2,075 €/m²) and Málaga (2,027 €/m²), the list of the seven capitals with unit values above 2,000 €/m².
In this sense, during the fourth quarter of 2020, the largest year-on-year increases in terms of sales prices in the districts of Madrid were seen in Vicálvaro, Hortaleza, Villaverde and Moratalaz. In Barcelona, the fall has been practically generalised, with increases only in the districts of Les Corts, Hortá-Guinardó, Sant Martí and Grácia.
Sharper falls in rental prices
In general terms, the fall in rental prices during this quarter has been somewhat more pronounced than the fall in sales prices. The only municipalities that remain with rents above 16 €/m²/month are Barcelona and Madrid, although San Sebastian is close to this figure with an average of 15.8 €/m²/month, followed by the Balearic Islands with 13.10 €/m²/month. In these cities, rental prices for an average 90 m² property are around €1,600. Meanwhile, the provinces with the lowest rental trends and, therefore, the lowest rents are Cuenca, Jaén, Teruel, Cáceres, Zamora and Ciudad Real, all with rental units below €5 €/m²/month.
Significant effort by the development sector
Throughout 2020, the development sector has demonstrated the enormous effort it has made to meet the current demand for housing. During the first nine months of the year, the number of certifications has increased by 10.9% compared to the same period in 2019, despite the fact that construction management approvals have decreased by 23.6% during the same period. The regions in which the most certifications have been approved continue the trend of previous months, with the Community of Madrid, Andalusia and Catalonia leading the ranking.