Spanish Real Estate Market: Falling Sales, Rising Prices



Discover the latest trends in the Spanish real estate market as house prices reach a new record while sales experience a noticeable decline. Gain insights into the potential impact on prices and market dynamics.

The Spanish real estate market has experienced a surge in house prices this summer, reaching record highs. However, there are signs of a slowdown in growth, with real estate sales declining and the possibility of price adjustments looming. According to Idealista, residential property sales in Spain fell by 16.5% year-on-year, while mortgage lending also saw a decline of 14.5%. Despite this, new home prices continue to rise, with a 0.8% increase year over year, driven by robust construction activity. The average housing price reached €1935 per square meter, the highest since 2008.


Spanish Real Estate Market: Falling Sales, Rising Prices

In the secondary housing market, 11 communities recorded annual growth, while in the new-build segment, growth was seen in 16 autonomous communities, with the exception of Galicia. The highest price increases were observed in Navarre (10.7%), La Rioja (5.4%), Madrid (5%), and the Canary Islands (4.3%). Regions with high prices for new homes include the Basque Country, Balearic Islands, and Madrid, exceeding the €3,000/sqm mark, while Castile-La Mancha and Extremadura remain the most affordable with prices under €1,200/sqm.

Despite the record prices, the market remains moderate, with the average house price decreasing by 0.3% in the third quarter compared to the previous one. Home sales fell by 7.8% in the third quarter, with new home sales decreasing by 12.4% and existing home sales increasing by 0.6%. The number of residential mortgages also saw a decline of 2.9% in the third quarter, reflecting an annual decline of 14.5%. Rising interest rates have impacted activity in the sector, while foreign investor interest in Spanish real estate remains at 15.4%, with British investors remaining the most active.

In conclusion, while the Spanish real estate market has seen record prices and strong growth, there are indications of a slowdown in growth and a moderation in market activity. The impact of rising interest rates and declining sales volumes are factors to watch in the coming months.

Spanish Real Estate Market: Falling Sales, Rising Prices

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