The price of urban land in Madrid and Barcelona has more than doubled since the low point of 2012 and threatens the recovery of the property market by forcing developers to market homes at prices above consumers’ purchasing power.

National developers are the most vocal denouncers of increasing land prices, which are being driven by the shortage of urban plots and the difficulty of obtaining licenses for new developments.

According to a Real Estate Press report based on the performance of Valdebebas, a development located 21 kilometres from central Madrid, the price per square meter has increased from 700 Euros in early 2014 to 1,200 Euros last year and looks set to rise to over 1,600 Euros.

According to sources, land purchases tripled last year to reach 929 million euros (7% of total real estate investment). Most of the transactions, according to the report, were plots destined for development, which attracted an investment of 706 million euros, which is seven times the investment made in 2014.

National investors only made 1% of the investment, and real estate companies, many of them associated with international funds, 43%. The bulk of the funds, however, were direct fund investments (38%) and Socimis (18%), which together invested 523 million euros.