The real estate market in Spain in 2022, according to official statistics and those presented by the largest Internet portals, showed stable growth. Nevertheless, leading market experts note that the impetus for growth was given in the post-pandemic period of 2020-2021, and throughout 2022 the market continued to develop by inertia.
The Real Estate Market in Spain: Purchase and Sale
The unstable political situation in Europe, the energy crisis, rising energy prices, unexpectedly high inflation in 2022, the decline in the purchasing power of Spanish families will negatively affect the market in one way or another, slowing down its inertial movement. And in 2023, we are likely to see a very, very moderate price increases within 2-4% per annum. Unfortunately, income growth of most families will not keep pace with rising costs and inflation, and homeownership will once again become unaffordable for many people.
Interestingly, the difference between the seller’s price indicated in announcements and the buyer’s price, which the latter is willing to pay for this or that property object, is on average 20%. Such statistics are monitored by the idealista portal that offers site visitors to indicate how much they would be willing to pay for a certain housing.
In 2022, the peak of real estate sales in Spain was in September: this month recorded the highest annual price increase (+6.9% compared to September 2021) and the largest number of transactions. Nevertheless, by the end of the year, all large real estate agencies in the country noted a drop in applications by 20-40%. As for new properties from developers, experts predict excess of demand over supply. A similar trend could be seen in the new housing market throughout 2022: despite a noticeable rise in the price of new properties, many buyers prefer them to secondary market properties. The reason is the widespread introduction of new technologies in construction: soundproofing, energy-saving, etc.
Mortgages in Spain: Forecasts for 2023
The mortgage market will surely change in 2023:
- firstly, due to the growth of interest rates in Spain, the demand for mortgage lending will decrease;
- secondly, loans issued at a fixed interest rate or a mixed interest rate will come first;
- thirdly, banks will start toughening the conditions for obtaining mortgage loans.
In April 2022, the Euribor, to which the floating interest rates of Spanish commercial banks are pegged, expected the negative zone and reached 3.018% by December 2022. Banks, all as one, note an increase in applications from their clients for the re-registration of existing mortgage loans from floating interest rates to fixed ones.
Forecasts for the market regarding the number of transactions give a decrease of 15-20%. The year 2022 ended with a record 600,000 transactions, comparable to the Spanish property boom years. At the same time, experts predict an increase in the number of offers and an increase in the average term for the implementation of objects, which will play into the hands of buyers and allow them to take their choice more slowly and more thoughtfully. A significant slowdown in price growth is expected, but this is not about price reducing.
Real Estate Prices in Spain in December 2022
In December 2022, the average price per square meter of housing in Spain was 1,921 €. According to the idealista portal, the distribution of prices by region is as follows (in parentheses are historical highs):
| Balearic Islands | 3,706 €/m2 | 3,706 €/m2 – December 2022 |
| the Autonomous Community of Madrid | 3,122 €/m2 | 3,133 €/m2 – November 2022 |
| the Basque Country | 2,783 €/m2 | 3,244 €/m2 – April 2011 |
| Catalonia | 2,333 €/m2 | 2,573 €/m2 – June 2007 |
| Ceuta | 2,084 €/m2 | 2,256 €/m2 – январь 2021 |
| Canary Islands | 2,083 €/m2 | 2,083 €/m2 – December 2022 |
| Melilla | 1,874 €/m2 | 1,917 €/m2 – May 2022 |
| Andalusia | 1,866 €/m2 | 1,924 €/m2 – July 2006 |
| the Valencian Community | 1,643 €/m2 | 1,839 €/m2 – January 2006 |
| Navarra | 1,562 €/m2 | 1,787 €/m2 – December 2007 |
| Cantabria | 1,505 €/m2 | 1,988 €/m2 – January 2011 |
| Galicia | 1,355 €/m2 | 1,762 €/m2 – November 2011 |
| Asturias | 1,353 €/m2 | 1,847 €/m2 – June 2011 |
| Aragon | 1,333 €/m2 | 1,924 €/m2 – November 2007 |
| La Rioja | 1,273 €/m2 | 1,600 €/m2 – March 2011 |
| Castile and Leon | 1,147 €/m2 | 1,468 €/m2 – June 2011 |
| the Region of Murcia | 1,103 €/m2 | 1,684 €/m2 – September 2006 |
| Extremadura | 946 €/m2 | 1,203 €/m2 – April 2011 |
| Castilla-La Mancha | 890 €/m2 | 1,362 €/m2 – April 2008 |
The Real Estate Market in Spain: Rent
In 2023 in Spain, no any substantial changes on the rental property market are expected. Supply will continue to lag far behind demand and we will continue to face a severe housing shortage for long-term rent. Prices for long-term rentals in 2023 in Spain will continue to rise. According to recent statistics, in eight provincial capitals, the average cost of renting a home exceeds a third of the family’s income.
But what’s interesting is that many owners decide to sell their property after the first lease agreement. The reason is the high risks and legal insecurity of the owners:
- in the case of a long-term lease, this is due to non-paying tenants;
- in the case of empty housing, this is due to invaders «okupas».
Unfortunately, this state of affairs only exacerbates the already difficult situation in the rental market.
As before, the maximum problems with finding housing will be experienced by low-income families, entrepreneurs and single persons – these three categories of tenants cause the most concern among property owners.
According to potential tenants, market prices are overpriced by 14-20%. In 2022, according to statistics, the most «overvalued» regions were Andalusia and the Balearic Islands.
