Property
S pr pa op in’ in er s b En ty es gl ma t ish g
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GOING ALFRESCO
The pleasure of outdoor kitchens - see page 22
JUNE 2024
GALICIA: Palace in Pontevedra comes with its own inner-city park, while (below) this 14th century farm has vineyards. See How green is my valley, page 18
ANCIENT & MODERN
The Olive Press puts a focus on the architecture of northern Spain, from Medieval farmhouses and ancient palaces to the latest industrial designs
THERMAL: Power plant in Palencia has been described as a ‘cathedral of energy.’ See page 32
A
LEADING Spanish bank has completely changed its prediction for house prices
this year. Bankinter had last year predicted a 2% fall in house prices across the country. But now the Madrid-based bank has made a massive U-turn and foresees prices RISING by 3%. A recent report ruled that prices will rise throughout this year ‘at least in line with estimated inflation in Spain', although it does not rule out a possible slowdown.
FALL AND RISE Giant U-turn sees bank expect a sharp rise in prices when last year it predicted a drop for 2024 By Alex Trelinski
In 2023, prices went up 4.2%, compared to the projection that they would grow by only 1.2%. Bankinter, a joint venture between Santander and the Bank
of America, says that 2025 will continue to see an upwards trend with price rises of around 2%. Its reasons for the big change are the strength of the labour market, the shortage of supply, the sharp rise in rental prices and a recent interest rate cut
by the European Central Bank (ECB). Bankinter estimates a shortage of more than 50,000 properties per year, compared to an annual demand of 150,000 homes. The deficit is concentrated in the main cities such as Madrid,
Barcelona, Valencia and Bilbao, as well as the Mediterranean coast. The Canary Islands and the Balearic Islands also have a serious shortage of properties. Added to this is the rise in rental costs due to a lack of rental housing which has fallen by 15% in the last 12 months. According to figures from property portal idealista, this
is a result of legal uncertainty, the poor Housing Law and the increase in other alternatives such as tourist rentals. House prices could be further increased by interest rate cuts which will reduce the 12-month Euribor rate. Bankinter estimates that the 12-month Euribor will end in 2024 at 3.25%, falling again in 2025 to 2.75%, which will translate into a moderate fall in mortgage repayments. Regarding sales, the bank forecasts a drop of 5% in 2024, compared to the previous estimate of 7%.