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REAL ESTATE PRICES SPAIN 2023
Property prices in Spain in 2023.
It is predicted that 2023 will be a better year to buy a house:
property prices in Spain seem to have peaked.
The house price spiral seemed to have no end in sight. Runaway after the pandemic and after two years of non-stop rises, housing seems to have finally peaked.
For that, several stars had to align: inflation, rising interest rates and mortgages, the economic crisis (and families' loss of purchasing power) and stagnant wages.
All this eventually took its toll on the property market, which sees a recession coming as early as 2023.
From this point onwards, experts predict a much more stable period for house prices. In fact, the latest figures published by the government on the assessed value of homes already show this.
Why? In recent months, we have seen how inflation has hit households' wallets, fears of a crisis, the rise in mortgage rates due to rising interest rates and fluctuations in the Euribor. The report's authors also point to "stable unemployment prospects" and tighter mortgage conditions. All this will cool the market, with some experts predicting a recession next year, resulting in price falls.
The end of a major property boom. "2023 will end the big boom that started in the second quarter of 2021," pointed out the latest report on the property market, prepared by the University of Barcelona and the consultancy Forcadell.
"In the first quarter of 2023, there will be a slowdown that we have already seen in other countries and that will eventually also affect Spain, and that will occur in sales and purchases, but also in rentals."
As the report points out, we see agencies reducing the number of interested parties by 20-40%, indicating that interest rates are starting to pick up and uncertainty has set in.
Market in recession. The phenomenon could occur in most countries, according to this article in EL PAÍS. As wages stagnate despite high inflation, housing will become more unaffordable. This could push the market into recession. If ECB interest rates reach or exceed 3%, sales could fall by around 15%. Since there will be less demand for homes, homeowners will have to lower their prices to sell.
While it is not entirely clear whether housing starts will fall in 2023 or 2024, there is one thing on which all forecasts agree. And that is that the number of sales and purchases will fall. Tinsa predicts a 5% drop in transactions. BBVA Research also sees a decline, despite estimating that housing will rise by 2% in the coming year. And Bankinter predicts a 3% decline in 2023 and another 2% in 2024. Still, with all this data on the table, it remains difficult to predict what might happen. Nobody expected the current situation two years ago and here we are.
We, ImmoMoment, think that property prices in new construction projects will continue to rise in 2023 (and beyond) in good locations.
Where this is not the case, reason may be location (cheaper land) and/or the use of lower-quality materials.
We also notice at our offices in Alicante and Marbella that demand for property in Spain continues to increase from investors outside Europe such as the United States, South America, North Africa and Australia.
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