The report highlights that these factors cause the market prices to approach saturation, which favours a deceleration and stagnation in demand.
In terms of the big cities, Malaga stands out with almost all of its purchasing market overpriced at 99%. Bilbao also has a high percentage with 74%, followed by Valencia with 69%.
Madrid has 51 % of its purchasing market overpriced, with a further 21% at risk of creating a bubble (72% in total). Barcelona has an overpricing percentage of 36% with a further 48% at risk of creating a bubble (84% in total).
Regardless, when taking into account the whole of Spain and incorporating all the remaining mid-sized and small cities, the data shows a different situation, with 22% of the purchasing market overpriced.
The chief data & analytics officer at Gloval Analytics, Carlos Gómez, commented that «in a context where the real estate market is trendy and there is debate concerning its legislation, the data does not allow us to obtain information for us to take decisions and legislate more fairly and with a better knowledge of the details, without falling into generalizations which are not true to the reality of our cities’ diversity. To legislate on rental without enough knowledge can lead to unfairness and counterproductive effects».
The markets at risk of creating a bubble are unstable and very susceptible to the current economic circumstances, which means that if those circumstances become worse it may cause a sudden drop in prices within these markets, explained sources at Gloval.