PROPERTY SEARCH

Date Published: 24/04/2024

How will the Spanish real estate market behave this summer?

Experts predict house prices in Spain will rise slightly amid fresh demand from foreign buyers

As the summer season approaches, Spain's real estate industry is gearing up for another busy quarter. Jesús Duque, Vice President of Alfa Inmobiliaria, shared his insights into what lies ahead, emphasising that persistent housing shortages coupled with heightened demand from abroad could lead to price increases in the coming months.

Despite growing unemployment levels, the overall Spanish economy is proving to be resilient. After growing by 2.4% in 2023, economists predict continued expansion in 2024 at around 1.6%.

Mortgage rates, meanwhile, "peaked in October last year, and have since drifted downwards. So, as long as inflation remains contained, this trend should not change," the expert predicts.

As a consequence, "we forecast that the fall in home sales will bottom out in the first half of this year."

But a dwindling stock of housing continues to cause problems, according to Toni Exposito, Operations and Development Director at Keller Williams, who sees house prices being set this summer at two very different speeds. On the one hand, property costs should remain steady or even rise in desirable city hubs and the more touristy areas, while prices are predicted to drop in areas "where unemployment, mortgage rates and inflation have had a greater impact".

Across the board though, both Duque and Exposito agree that newer constructions might see steeper increases owing to scarcity and enhanced building standards justifying premium charges.

Another common forecast among the experts for the upcoming quarter is that "the number of transactions will continue to rise slightly compared to last year, as they have already risen by 7% in January of this year," Expósito said.

"We are already experiencing a downward trend in February, closing at 3.67%," he added.

A key factor in these predictions is increased demand from foreign buyers. Home purchases from abroad are expected to rise again, "surpassing last year's quotas in the second quarter, which is usually a very good period for British, German and French buyers on the coast".

In other news: Four arrested in Spain-wide solar panel scam

Image: Archive

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