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What will happen to property prices in Spain in 2024?

The Local Spain
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What will happen to property prices in Spain in 2024?
What will happen to property prices in Spain in 2024? Photo: Frames For Your Heart / Unsplash

Thinking of buying a home in Spain in 2024? Find out what the experts predict for the market in the year to come.

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The price drops that many property experts forecast for this year did not materialise and in fact the cost of buying a home in Spain actually increased by seven percent in the last year.

In the biggest cities of Madrid or Barcelona, property prices skyrocketed and some even reached levels never seen before.

There was also a strong upward trend along the Mediterranean coastal areas and the Balearic Islands, which many believe was driven by international demand.

According to the latest housing stats available, in Alicante and Palma de Mallorca the prices rose by 15 percent, while it was 14 percent in Valencia and 13 percent in Málaga.

2023 comes to an end with a continued rise in house prices in Spain and an even greater demand due to a decreasing supply.

The Housing Law brought in earlier this year sought to solve the rental problem, but has so far caused more issues for tenants, meaning a lack of supply and an increase in prices. Part of this is due to the fact that it generated a significant shift from permanent rentals to seasonal rentals, making it even more difficult for families to access housing.

READ ALSO: Spain's rent freezes and housing law fail to prevent price rises

Real estate experts predict that price tensions will continue to increase in 2024 in the most dynamic markets, while in the rest, they may begin to stabilise or even fall.

The real estate employers' association argues that in some areas prices are too high and should drop by at least 10 percent, so that the population can afford them – but is this likely to happen within the next year?

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Laura Martínez, spokesperson for mortgage comparison site iAhorro, told local daily Ideal recently that the market has begun to stabilise and everything indicates that this will be the trend in the coming months. “Inflation is being controlled and the European Central Bank should not raise interest rates further, so there could soon be reductions in prices”, she said.

Because of this Martínez believes that the first six months of 2024 will continue to be marked by "instability" but that the market could rise again in the second half of the year.

Bankinter on the other hand has forecast a two percent drop in prices. The bank predicts that the decline will be moderate and temporary, however. "Prices should tend to stagnate and could even fall slightly next year. But, if this correction occurs it will be temporary due to the high rate environment," the company’s latest report on the real estate sector states.

Not everyone agrees that the prices will stabalise or fall, though, Ferrán Font, Head of Studies at Pisos.com estimates that prices will continue to rise in 2024, but they will be less pronounced at will only increase by around 1 to 2 percent.

"Significant drops are not going to come, especially with the upward path of rates being stagnant," argues Font. He does, however, predict a possible decline in secondary locations, away from the main markets with the highest demand. “The trend of demand towards urban concentration will keep the pulse in the main capitals,” he added.

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What about the difference in the price of new builds vs second-hand properties in in 2024, how will they compare?

Pelayo Barroso, national director of Savills Research says: “The trend in new construction prices will continue to increase given the limited supply. We think that prices will grow around 5 percent throughout 2024. In the case of the second-hand market, the situation is very heterogeneous. In general, prices will tend to remain stable or fall slightly (3-7 percent) in areas where the product is more abundant and demand has less access to the mortgage market”.

Ernesto Ferrer-Bonsoms, business director of Solvia agrees for the most part and believes that despite the current economic instability, marked by persistent inflation and high-interest rates, “2024 will continue to be a dynamic year in the number of real estate transactions” and that the market will begin to stabilise.

He predicts a reduction in the number of transactions of between 5 and 8 percent compared to 2023 though as a consequence of increased interest rates and the lack of supply.

Conclusion

If you're looking to buy in one of Spain's main property markets such as the Mediterranean coasts, Barcelona, Madrid or the Balearic Islands you're unlikely to find a great bargain in 2024 and prices may continue to rise. 

Elsewhere in the country prices will begin to stabilise and some are even predicting slight drops. 

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