A few months ago, experts warned that housing prices in Spain would stabilize: perhaps they would correct slightly in some areas, but there would be no sudden drops. The forecast has been fulfilled in a large part of the territory.
Irene González, account executive at Housfy Compraventa, has noticed a very slight growth in prices over the last two years despite the decrease in the number of transactions. This has been the case in cities like Barcelona, ??where the average price per square meter (according to Habitatge) has increased by just over 2 euros between 2022 and 2023. Also in Madrid or the Mediterranean coast (València, Málaga), where “buyers who paying in cash have saved the sale of homes,” González clarifies.
The market has noted, however, a revival in the first months of 2024, encouraged by a certain optimism in the European and Spanish economy: interest rates seem to have peaked, the Euribor has stabilized, inflation has been contained, “People have gotten used to the situation,” says Irene González, from Housfy.
The case of large cities will not be the same as that of secondary towns. It may be that those who need liquidity sell their second home and increase the supply of real estate, which would lower the price of housing. The situation will vary depending on the situation of the sellers and the idiosyncrasies of each municipality.
Approximately two out of every five closed transactions are for people who buy a home to rent, as an investment, and pay in cash.
Seeing rents limited by the state housing law and the new decree of the Catalan Generalitat to regulate temporary and room rentals, Marc Bosch, account executive at Housfy Compraventa, fears that operations of this type will be reduced: People will migrate to other financial assets that give, perhaps, a little less profitability, but more stability.
The objective of the law is to offer facilities to young people with a good profile who want to access their first home. Whether it will be achieved or not remains to be seen; but a reduction in the demand for housing for investment could cause a “downward evolution of housing prices in areas that the Government has declared as stressed,” according to Bosch, a drop that could approach 5%: “Housing in Barcelona that now cost 400,000 euros could cost close to 375,000 or 380,000 euros.”
The Government, with measures such as the housing law, intends to regulate the rental market, without having much control over it. A really effective way would be to expand the public rental housing stock, as Marc Bosch believes.
By concentrating a large percentage of the total housing stock, the Government could put them up for rent at affordable prices and influence the price of the private market, which would be forced to compete against public prices.
Furthermore, the non-disposal of this park is crucial: in the future, if the price of housing for sale skyrockets again, the Government could put part of this park up for sale at very affordable prices, which in turn would influence the price at which individuals list their properties as property.
As a general rule, the experts consulted confirm, there will not be a significant increase in prices. Whoever is waiting for her with an empty property is, in short, wasting their time.
On the other hand, it is almost impossible to predict what events in the macro environment—such as a war, a pandemic—can break out and end up conditioning the housing market in Spain.
“Buyers are increasingly encouraged,” concludes Irene González, taking into account the containment period that has extended from 2022 to early 2024.
The market is reactivated and the ideal time to buy is regardless of the environment, it varies depending on the profile. Anyone who wants to wait for interest rates to fall will find greater competition and generally higher prices. Whoever buys earlier will have less competition and a little more negotiating power, despite signing financing at a higher rate.