Spanish house prices jumped the most on record in the second-quarter, strengthening the foundations of the country’s economic recovery.
Housing rose 4.2 percent in the quarter compared with a 0.6 percent contraction in the previous three months, according to data released by Spain’s National Statistics Institute on Tuesday. That was the fastest clip since the institute, known as INE, started publishing real estate prices in 2007.
“These figures show the gradual recovery of the Spanish property market, which is necessary for the definitive reactivation of the real economy,” said Belen San Jose, an analyst at Bankinter SA.
The Spanish construction industry is healing from the economic meltdown that began in 2008 and left the country with a surplus of about 1.4 million homes after years of debt-fueled growth. The number of construction jobs increased in the second quarter as well, in the fifth consecutive period of expansion and property prices are also surging, heading for the first annual increase since 2007, after slumping about 40 percent.
Spain’s economy is expanding at the fastest pace in eight years and twice the average for the euro area following the worst recession in the country’s democratic history. Unemployment though is still at 23 percent, the second-highest in the euro area after Greece, as Prime Minister Mariano Rajoy prepares to seek re-election in December.