Housing prices in Spain rise by 10% in February, the biggest increase in 17 years

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

According to a report by 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 of the last 17 years, since the Fotocasa index has records. This rise puts us at levels similar to 2006, in the period of warming preceding the real estate bubble”, María Matos, director of studies and spokesperson for Fotocasa.

“This acceleration is produced by the change in monetary policy due to the increase in interest rates by the ECB, which has revived the demand for purchases and exerted pressure on prices due to the shortage of supply. “, they added.

The ECB has hiked rates by 300 basis points since July and promised another big hike in March, its fastest pace of monetary tightening yet, amid soaring inflation amid war in Ukraine and economic openness after COVID-19. 19 pandemic.

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

“From Fotocasa, we consider these increases to be temporary, that it is only a matter of time before the price starts to show signs of moderating and returns to a stable trajectory, given the rate of increase in mortgage prices caused by Euribor,” Matos said.

(Report by Tomás Cobos)