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Average property prices grew 6.8% in January, compared with the same month in 2018, according to property valuation firm Tinsa’s IMIE Monthly Report, representing the highest January rise in over a decade.

In all the categories identified by Tinsa, properties located on the ‘Mediterranean Coast’ saw the largest year-on-year price increase – rising by 10.1%, followed by properties in ‘Capitals and Large Cities’ (9%). Meanwhile, property prices in ‘Metropolitan Areas’ grew in line with the national average (6.8%).

There are several contributing factors to Spain’s property market growth, including a low Euribor (the rate in which interest is calculated on most Spanish mortgages) which stood at -0.116% in January and unemployment levels which fell by 5.49%, according to Tinsa’s market snapshot.

A recovering economy and an improving jobs market have contributed to a rise in mortgage approvals – which increased by 15.9% in November (the latest data available) while property sales grew by 3.9%. Within the same month, demand for new-build properties also created upward movement within the market with the number of building licence approvals growing by 40.1%.

Property prices are set to rise between 5% and 7% this year, as demand grows and market conditions improve, forecasts Tinsa. The valuation firm also predicts that sales figures will rise from 500,000 units to between 625,000 and 650,000 and the number of approved mortgage applications will grow by 15%. The number of building licences will continue the upward trend – reaching between 100,000 and 125,000 in 2019. Although these forecasts would put upward pressure on property prices, they would still be 36% lower than peak values reached during the property boom – so it is still very unlikely that a boom/bust cycle is on the horizon.