There has been almost a decade of consecutive house price rises in Spain, but the end of 2023 looks set to bring this upward cycle to an end according to property market analysts.
Many property experts foresee a fall in prices in Spain in the coming months, though they are not anticipated to be huge and will not be spread evenly across the country. In many parts of the country, particularly big cities, prices will continue to rise.
Property prices in some parts of Spain will reportedly fall mainly as a result of the rise in mortgage rates, the persistence of high underlying inflation, and the tightening of bank credit, a confluence of factors that has deterred many potential buyers from purchasing property and forced them to stay in the rental market instead.
A panel of property analysts speaking to El País agreed that they all see signs of moderation in the market moving towards the end of the year, with most forecasting declines of between 2% and 5% by 2024. The consensus was that sales and purchases will continue to decline.
Economy professor at Barcelona University Gonzalo Bernardos went further and predicted price drops of 5% by the end of 2023 and then an additional 3% fall for the first half of 2024.
Yet despite the increasing cost of mortgages making it difficult for some people to access home ownership, demand remains strong in metropolitan centres and there are big market differences between different parts of the country. It does seem that in certain parts of Spain the decreases could become more marked as the year draws to a close in the run-up to 2024.
Property price fluctuation depends significantly on where in Spain it is. In larger cities and coastal areas and islands, for example, there is unlikely to be a fall in prices. It is in inland towns and cities, as well as more rural areas, where prices are likely to drop.
However, some experts seem to think that any falls in property prices will be a short-term phenomena. “In the long term, it is a bullish market that will continue to rise in the coming years at different speeds… (but) in some cases we will see a significant drop,” says EAE Business School professor Víctor Fermosel.
Over the last few years we have seen the analysts predict property price drops that never occurred, during the pandemic the prediction was for 10% to 15% drop that never materialised so we will have to wait and see how accurate the predictions are this time.
What they seem to agree on is that the drops won’t be significant or long term if they do materialise
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