The five most expensive Spanish capitals for buying and renting

Housing prices continue to rise after a 7.2% increase in August, reaching an average of €2,004 per square meter nationwide. Despite this growth, they are still 5.3% below the historical record for housing prices in Spain. At the same time, the average rent has reached €12 per square meter per month for the first time, marking the highest point ever recorded in idealista's monthly reports, following a 9.5% annual increase in August.

Currently, five Spanish capitals have the highest prices for sales and rentals. They are:

• San Sebastián
• Madrid
• Málaga
• Palm
• Santa Cruz de Tenerife

Interestingly, throughout August, 25 provincial capitals reached the upper limit of rental prices, while in the sales market, there are only eight such capitals, and all five of these cities overlap in both segments.

San Sebastián holds the top spot for average housing prices in this group, with a price of €5,326 per square meter, ahead of Madrid at €4,015 per square meter and Palma at €3,863 per square meter. Rounding out the top five:

• Malaga at €2,594 per square meter
• Santa Cruz de Tenerife at €1,888 per square meter

At the same time, Santa Cruz notes the largest price increase over the past year with a rise of17.7%...followed by Malaga with...13.7%and Palma with13.2%.

While the price increase in San Sebastián is3.6%, and in Madrid —3.1%They have been accumulating increases since the end of the pandemic and the economic crisis. In 2018, the Spanish capital broke the price barrier set by the previous construction boom. The growth rates continued until the beginning of the pandemic, after which, at the end of 2020, prices slowed down a bit. However, starting from mid-2021, housing prices in the capital have been continuously rising and have already exceeded since June.€4,000per square meter.

The lack of supply is causing rental prices to rise. Currently, rents in Madrid exceed those in San Sebastián, where the cost is€17.4per square meter, second only to Barcelona with€19.4per square meter.

Next on the list is San Sebastián with€17per square meter in August. The palm costs€14.7Málaga —€12.8, and Santa Cruz de Tenerife —€10.5Among these five capitals, which show peaks in both sales and rentals, the Andalusian capital and the Balearic Islands stand out with an increase of more than20%In annual terms, only behind the increases in Valencia and Alicante, which have also reached new records in rental prices, but not in sales.

Sharp price fluctuations in San Sebastián11.4%) and in Madrid (10.9%Over the past year, there have also been notable increases. In August, at least 14 capitals recorded double-digit increases in rental prices. As Francisco Inareta, a representative of idealista, recently stated in an interview with El País, "The main problem in the rental market is the lack of affordable offerings. Supplies are not recovering and continue to be insufficient for demand, and as long as these pressures persist, we will see continued price growth."

According to recent studies, prices have been at record highs across Spain for the ninth consecutive month, as well as in most provincial capitals. Serious measures are needed to ensure a greater number of homes on the market. As seen in the situation of 2020, when a significant increase in supply led to double-digit declines in rental prices nationwide. It is important to rethink the relationship between tenants and landlords, as the latter are essentially a crucial part of the solution to the problem.