Are property prices falling in Spain in 2023?

Are property prices falling in Spain in 2023?

It is a fascinating and hugely relevant question; the 2020s have so far been punishing years for Europe and its economies, what with challenges such as the COVID-19 pandemic, the Russian invasion of Ukraine, sticky inflation, and high interest rates. So, what has the effect of all this been on Spanish house prices – could they even be on the slide?

In a word: no, they aren’t. Or at least, that’s not what the evidence indicates, which will be of interest to quite a few people who are currently perusing the latest property listings of estate agents in Sotogrande.

In fact, the signs are that as far as the property market is concerned, Spain has proved a success story in an otherwise struggling Eurozone. So, let’s take a closer look at what the pertinent statistics say right now.

The steady climb of Spanish property values since 2014 has been continuing apace

If most of us now look back at the first few years of 2020s and consider those to have been tough times, it is worth reminding ourselves of the situation back in the late 2000s and early 2010s.

Amid the “credit crunch” and global economic slowdown, the prices of newly constructed homes in Spain fell to as low as €2,002 per square metre in 2014, compared to the €2,874 that had been seen in the then-thriving market of 2007.

Ever since then, according to data shared by Statista, there has been a steady recovery in those housing values in Spain, reaching €2,809 in 2023 – just below the levels seen in the late 2000s before the financial crisis struck.

Figures continue to filter through indicating a burgeoning Spanish housing market in 2023

Looking at much more recently released statistics, the story that is told very much tallies with the longer-term trend. Data released by Eurostat, for example, showed that house prices in Spain went up by 2.1% on a quarter-by-quarter basis in September 2023.

That’s impressive enough price growth when looked at in isolation, but it is even more so in the context of a mere 0.1% quarter-on-quarter property price rise in the Eurozone as a whole. Indeed, there were quite a few heavyweight Eurozone countries – including Germany, France, and the Netherlands – in which house prices actually declined again on a quarterly basis during the second quarter.

On a year-on-year basis, Spanish property prices recorded a healthy increase of 3.7%, even though across the Eurozone, the average score was a 1.7% fall in home values.

It’s quite something to think that if it wasn’t for the escalating interest rates on mortgage loans for Spanish home purchases in recent times, such growth figures could have been even more stellar.

So, how is the Spanish property sector managing to do so well in this regard, where the likes of France and Germany are not? Industry observers have cited such potential factors as strong immigration-fuelled increases in the numbers of Spanish households, and insufficient growth in the supply of housing to meet demand.

Spain has also enjoyed stronger economic growth lately than the wider Eurozone; ING has forecast that this will be 2.5% for Spain in 2023, compared to a mere 0.5% average growth for the Eurozone. Such economic expansion, in turn, supports the country’s property market.

So, there might be little point waiting for Spanish house prices to drop…

Of course, if you are currently looking at what estate agents in Sotogrande have to offer as far as attractive housing listings are concerned, your decision on the timing of any purchase will need to be entirely yours. Furthermore, market movements are just one factor that you might take account of when making such a decision, as your own personal circumstances will matter a great deal, too.

Still, it is clear that even the turbulence of the last few years has not been sufficient to push Spanish property values downwards. In any case, the prices for Sotogrande properties have historically been very robust, even during times of trouble for the broader market in Spain.

If, then, you are eager to see the most competitive property listings that might be available to you for a while, you could do much worse than checking out our latest ones today, right here at Property Sotogrande. Who knows which opportunities might tempt you?