House prices in Madrid and Catalonia are rising

Property prices in Madrid and Catalonia are growing at a rapid pace, with Madrid's price growth in the third quarter of last year even greater than during the bubble ten years ago.

According to the house price index published at the beginning of December by the Spanish Statistical Institute (INE), the change compared to the third quarter of 2016 was more than 12% in the Madrid region. This figure exceeded the 11.3% registered in the first quarter of 2007.

Catalonia has yet to reach the 11 percent threshold in the region in the first months of 2007, but at 10 percent, prices are rising at the second-highest rate on record.

The situation in these two regions is in stark contrast to the rest of the region. In Extremadura, prices have remained unchanged over the past year. In Asturias and Castilla-La Mancha, prices have increased by less than 1%, while in Castilla y Leon, Murcia and Navarre, they have increased by around 2%. The only other region where prices are rising by double digits is the Balearic Islands, although they are up 9% in Q3, but they are still far from the record of 16% in 2007.

Despite significant regional differences, strong gains in the dominant cities of Barcelona and Madrid saw the national figure rise by 6.7%. This is the highest annualised figure in the national house price index since the third quarter of 2007.