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Buying a Home in Spain: How Do We Expect the Market to Behave in the Final Stretch of 2023

Buying a Home in Spain How Do We Expect the Market to Behave in the Final Stretch of 2023 - Buying a Home in Spain: How Do We Expect the Market to Behave in the Final Stretch of 2023

The real estate market shows signs of a slowdown. Home purchases fell 14.5% year-on-year in June 2023, according to data from the General Council of Notaries. But how does this reality influence housing prices? Knowing the evolution and prospects of the market is essential to make a decision such as buying a home in Spain.

Real estate market situation

As in other countries, the Spanish real estate market has experienced exceptional circumstances. The lockdown during the pandemic increased families' financial cushions. With very low-interest rates, the number of sales skyrocketed.

However, the war in Ukraine and its economic effects would soon take its toll on rising prices and inflation. To contain them, the European Central Bank decided to raise interest rates. And the rise in mortgage prices is resulting in a cooling of the real estate market.

What is the forecast for the coming months?

It might seem that this cooling will result in lower prices. They have moderated in recent months. However, what the Spanish real estate market is registering is more of a containment than a decline.

We can see it in data from the National Statistics Institute. According to the INE, housing prices in Spain increased by one-tenth in the last quarter. In interannual figures, it stands at 3.6%. Why don't prices go down? Several factors are linked, and we must consider them when buying a home in Spain:

A demand for housing that remains, driven by an active labour market and rising salaries.
Increase in construction costs, which gets reflected in new construction housing.
More expensive mortgage loans, with interest rates that could still rise more.
The growing push of foreign investors, who have an increasing presence in the Spanish property market.

Therefore, forecasts indicate that prices will maintain an upward trend. CaixaBank Research experts estimate increases of 2.9% until the end of 2023 and 1.1% in 2024. Other experts are more cautious, although they share bullish forecasts.

Despite this, this growth will be uneven, an aspect we should not forget when buying a flat in Spain. For example, the year-on-year change in prices has been higher in Madrid and the Canary Islands than in Catalonia. Meanwhile, negative rates have already been recorded in Galicia and Extremadura.

Is it worth buying a home in Spain now, or is it better to wait?

Experts predict that the pressure of housing demand and a supply not growing at the same speed will maintain or increase prices in most of Spain. To this, we must add that a new increase in interest rates is likely.

Therefore, it is good timing to buy a flat in Spain. If it is your decision, you can search for your new home on Spainhouses.net, where you will find many listings available in the best areas of Spain.

Furthermore, to help you choose, on our website, you have a statistics section where you can check the evolution of housing prices. Take the first step to avoid paying more for your new home.

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