Pandemic may be boosting property values outside major cities
Market Values
The latest monthly data published by leading Spanish property valuation firm Tinsa show that average market values of homes were 0.7 per cent higher in February 2021 than in the same month last year, although in the category of “capitals and large cities” a 1.4 per cent drop is reported. The Pandemic may be boosting property values outside major cities.
It is reasonable to suggest that this slight depreciation in the value of homes in major cities is a consequence of the pandemic for two reasons:
1 : On one hand, it could well be a reflection of the changes in preferences caused by the long periods of lockdown as the availability of private gardens and terraces becomes a priority for many buyers
2: While on the other hand it is also a fact that for many people the pandemic has resulted in a lowering of their purchasing power, and more affordable properties are generally easier to find outside the major cities of Spain.
In other categories, year-on-year increases are reported in “metropolitan areas” (+1.3 per cent), on the Mediterranean coast (+2.3 per cent), in the Balearic and Canary Islands (+3.7 per cent) and in the catch-all category of “other municipalities” (+2.2 per cent).
Low Interest rates
The low interest rates currently available on mortgage loans ought, in normal circumstances, to be associated with healthy sales figures and upward pressure on market values caused by widespread demand. But the current circumstances are by no means normal, and the surge in unemployment since the pandemic was first detected in Spain a year ago has led to far fewer people being prepared to buy a home.
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