House prices in Spain increased by 4% in 2023 despite an overall fall in sales, according to new property data from the House Prices Index published by Spain’s National Statistics Institute (INE).
Though this suggests a slight cooling in the Spanish property market, particularly compared to 2022, when prices rose by 7.4%, prices for both new build (7.5%) and second hand properties (3.6%) still increased year-on-year in 2023.
The 2022 increase was the highest annual price variation in over a decade.
Experts say the gap between new and second-hand property price rises is evidence of internal tensions within the new build construction market, where supply is scarce.
Though prices do seem to have moderated somewhat, the comparatively softer price rises in 2023 still occurred despite an overall fall in sales of 9.7% compared to 2022, and a significant 17.8% fall in new mortgages, INE data shows.
Interestingly, despite the overall fall in sales in percentage terms, 2023 was one of Spain’s best years for property sales since 2007, with 586,913 sales and the third best mortgage year since 2011 with 381,560 transactions signed.
Even though the Spanish economy has fared better than many of its European neighbours in getting a grip on inflation, the price rises come in spite of interest rates hikes in recent years and the lingering effects of inflation weakening spending power.
A strong intention to buy on the ground against the shortage of existing stock, which is becoming increasingly significant, creates an imbalance that pushes the price up.
If you are looking to buy a property in Spain and need a mortgage, email