The new year is fast approaching and that means it’s time to review 2023 and think about what you want to achieve in 2024. Is one of your dreams or goals for 2024 to finally buy that house in Spain? Then this article is for you!
We’ve scoured the web to find out what the best market experts predict the Spanish property market is going to look like in 2024. Will prices go up or down? And is now the right time to buy property in Spain? Here’s what you need to know:
What Happened In 2023?
12 months ago many property experts predicted that 2023 would see significant property price drops in Spain. But these forecast drops didn’t materialise. In fact, the cost of buying a home in Spain actually increased by seven percent in the last year.
The cities where property prices increased the most were the largest cities of Madrid and Barcelona. In both cities property prices skyrocketed and reached record levels in many cases. Other areas of Spain that saw strong increases of property prices were the Mediterranean coastal regions and the Balearic Islands. Increased prices in these areas were largely driven by international demand with these being the areas most appealing to foreign buyers.
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.
There is a decreasing supply of properties in Spain right now but there has not been an increase in demand which is only pushing property prices up higher and higher across the country.
How Has The 2023 Housing Law Impacted Property Prices In Spain?
Earlier this year the Spanish gocernment introduced a new Housing Law with the intention of easing the rental crisis in the country and ensuring there were more rental properties available for Spanish nationals. At this point critics agree that this law has caused more issues for tenants than it has solved, 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 which are surrounded with less restrictions. This has made it even more difficult for families to access housing in Spain.
What Will Happen To Property Prices In 2024?
We’ve established that the 2023 property price predictions were incorrect and that mcuh of Spain is experiencing property price tensions right now due to increased demand and reduced supply. But what will happen to property prices in Spain in 2024?
According to the experts, this will depend on where you’re looking. In the most sought after locations it is expected that price tensions will continue to increase in 2024 but in the rest of the country they will begin to stabilise or even fall.
According to the Real Estate Employers Association in some areas prices are too high and should drop by at least 10 percent, so that the population can afford them. What we don't know is whether this significant decline will happen in the next 12 months.
Laura Martínez, spokesperson for mortgage comparison site iAhorro, stated in an interview with Ideal 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”.
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. However this price rise will not be as dramatic as it has been in 2023, as property priceswill only increase by around 1 to 2 percent. "Significant drops are not going to come, especially with the upward path of rates being stagnant.”
Will It Be Cheaper To Buy New Build Or Second Hand Properties In 2024?
This is a question that was answered by Pelayo Barroso, national director of Savills Research who stated that “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”.
Is 2024 The Right Time To Buy A Property In Spain?
Demand for Spanish property is high, but none of the experts expect that this demand will decrease in 2024. 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 then prices will continue to rise meaning that it’s better to buy sooner rather than later. Bargain price drops are unlikely to materialise.
Elsewhere in the country prices will begin to stabilise and some are even predicting slight drops.
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