The residential property market in Spain is seeing continued growth in the first quarter of 2018 as prices increased overall by 3.8% year on year, with activity led by Madrid and Palma de Mallorca.

The capital city saw prices increase by 17% in the first three months of this year compared to the same period in 2017 and by 14.7% in Palma de Mallorca, according to the latest index from appraisal firm Tinsa.

Prices also increased strongly in Barcelona with a rise of 11% and in Pamplona with a rise of 10.4%. But the growth varies on a regional basis, the index report points out that prices have fallen in three regions, down 1.3% year on year in Castilla-La Mancha, down 0.6% in Extremadura and down 0.1% in Galicia.

The highest prices are in Madrid at € 2,159 per square meter, followed by the Balearic Islands at €2,068 while the cheapest property prices are in Extremadura at just €768 per square meter.

Meanwhile, the latest index from Idealista shows that asking prices have increased on average by 2.2% in the first quarter of 2018, up to €1,621 per square meter compared to the final quarter of 2017.

Virtually all provincial capitals have recorded price increases but the index report explains that strong demand means that the larger markets are growing at a much faster pace than the rest.

Prices increased 1.2% quarter on quarter in Barcelona to €4,334 per square meter, a rise of 5.1% year on year but prices in the city are still 8.4% lower than 10 years ago when the real estate bubble burst.

Madrid recorded the biggest quarter on quarter asking price rise at 7.8% €3,540 per square meter and year on year prices are up by 21.3%. But they are still 12.3% down on the market highs of 2008.

The data also shows that in Valencia asking prices increased by 4.5% quarter on quarter to €1,743 per square meter, and are up 13.3% compared to the first quarter of 2017 but are still 37.8% below their peak.

Prices by 5.6% in Granada, by 5.2% in Logrono, while in Malaga they increased by 5%, in Palma by 4.8%, in Valladolid by 3.1%, in Zaragoza by 3% and in Seville by 2.2%. Prices fell by 0.3% in Bilbao, by 0.4% in Badajoz and by 0.5% in Oviedo.

Information from estate agents suggest that sales of new homes are also doing well in Spain. Transactions in Madrid and Barcelona are at their highest level since the property crash, according to real estate agency Lucas Fox.

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