A monthly index released by property experts TINSA has revealed that property prices in Spain in May rose month-on-month by an average of 0.3 percent compared to April, and are 4.8 percent more expensive year-on-year overall.

The range of price rises, however, depends hugely on where in the country the property is located. Spain’s islands and coastal areas, particularly the Mediterranean coast, were where house prices increased the most in the last month, while prices in inland Spain actually fell slightly.

According to Tinsa’s data, property is currently 4.8 percent more expensive than in May 2022, a slight decrease on year-on-year increases of more than 7 percent recorded throughout much of the second half of 2022.

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“The average national residential price continues its trend towards stabilisation in the face of rising financing costs and the loss of purchasing power in the face of inflation, although employment continues to sustain household solvency. As a result, sales activity is gradually moderating, maintaining levels above 2019,” Cristina Arias, director of research at Tinsa, told Spanish news outlet 20 minutos.

Coastal areas and islands have seen the highest increases, largely because they are the main beneficiaries of tourism that attract potential second-home buyers to the area, while in large cities and metropolitan areas, prices are generally moderating.

Property prices grew by 1.4 percent in the Canary Islands and Balearic Islands and by 0.9 percent on the Mediterranean coast in May.

“The islands and, to a lesser extent, the Mediterranean coast are experiencing a new momentum in prices that could be a reflection of second home buying and selling. Buyers have greater purchasing power and are less sensitive to inflation and rising mortgage costs, as they often require less external financing for the purchase of a second home,” Arias said.

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Compared to price levels in May 2022, housing in Spain’s archipelagos and coastal areas are 5.4 percent and 4.7 percent more expensive respectively than a year ago.

Across the rest of the country, prices continue to moderate, dipping slightly in some inland areas, although in metropolitan areas the increase in May was 6.3 percent in the year-on-year rate.

Prices in large cities rose by 4.3 percent compared to May 2022, while in inland Spain the increase was 3.3 percent, though the overall trend seems to be a downward one, as in January the year-on-year growth rate was over 7 percent.