Analysis Real Estate Market Spain 2023 Q4: coastal purchasing power

Real Estate Market Spain 2023 Q4

The last quarter of the year puts a stamp on the stabilization we saw in house prices in Spain last year. However, the coastal areas seem to be less affected by this trend in the Spanish real estate market. We tell you more about it in the Analysis Real Estate Market Spain 2023 Q4.

General situation real estate market Spain in 2023 Q4

In quarter four of 2023, the average value of homes in Spain increased by 4.1% compared to the same period last year. In comparison, the third quarter of 2023 was 5%, the second quarter 4.9% and the first quarter of the year 6.3%. This places the average variation for all of 2023 at 5.1%.

Coastal areas and larger cities see this decline a lot less. An effect of greater demand for second homes for personal vacation use, combined with a buyer profile with high purchasing power and who is less sensitive to the effect of inflation and interest rates in making their purchase decision.

The chart below shows the average value per sq. ft. and you can see the annual variation.

Spanish housing market figures Analysis real estate market Spain 2023 Q4
Average house value Spain per m²

Property prices in Spain by autonomous region

The stabilizing trend in house prices can also be seen in Spain’s autonomous regions. Year-on-year growth is slowing, but positive figures remain high.

Most regions are in the 3.5% to 6% range with their year-on-year increases. The statistics show little difference compared to 2023 Q3. Topping the list of variations are again the Balearic Islands with +8.1%, the Comunidad Valenciana (including Costa Blanca) with 7.5%.

The quarterly variations show some equality and stabilization throughout the area, with the exception of the Comunidad Valenciana, Catalonia and Murcia, which show dynamics. Nevertheless, no sharp price decreases are seen in any community. It follows that 3 to 9 regions have quarterly variations close to zero, and 7 regions have variations close to 1%.

Autonomous Regions Spain Analysis Real Estate Market Spain 2023 Q4
Spanish real estate prices and variation by autonomous region

Property prices in Spain by province

At the provincial level, the trend is not much different. Most provinces show annual increases between +3% and +5%. In terms of quarterly growth, 22 provinces show almost flat fluctuations, with variations of around +-1%, in line with the previous quarter’s trends in 21 provinces.

Provinces with the largest year-on-year increases are concentrated on the Mediterranean coast, particularly on the Costa Almería, Alicante (Costa Blanca), Valencia and on the Balearic Islands (Ibiza and Mallorca) and Tenerife.

The province of Madrid shows a year-on-year increase of +3.9%, but maintains a stable quarterly basis with a variation of 0.0%. The province of Barcelona, a major economic center, shows a year-on-year increase of +2.8%, with a quarterly increase of 1.4%. Impressive are the year-on-year increases in the province of Valencia (7.6%), Alicante (7.8%) and Malaga (7.3%).

Provinces-Spain_Analysis-Real Estate Market-Spain-2023-Q4
Spanish property prices year-on-year variation by province

Real estate prices in Spain's major cities

The major cities show overall stability, with some local momentum standing out, especially in the continually dynamic coastal cities.

Almost all major cities show positive year-on-year variations, ranging between 3% and 6%. Madrid registers an increase of +6.1%, while Barcelona shows an increase of +3.5%, both slightly higher than the previous quarter’s figures. Notable are the coastal cities of Valencia, Santa Cruz de Tenerife and Malaga, with year-on-year price increases around 9%.

Quarterly variations indicate general stabilization, with most cities ranging between 0% and +2% increase. Valencia shows one of the largest increases of more than 4%.

In terms of most expensive cities in Spain, Madrid (€3,780/m²) and Barcelona (€3,714/m²) once again maintain the top positions. Of course, that’s still a pittance when compared to a city like London (7,900 €/m2) or New York City (13,607 €/m2).

Conclusion real estate market Spain 2023 Q4

House prices in Spain are gradually stabilizing, a move in line with the gradual decline in housing demand observed since the end of 2022, following the European Central Bank’s interest rate hike. However, in terms of house prices, the coastal areas are little affected by interest rates or other influences such as inflation. This is explained by the reason for the purchase (vacation home) associated with the purchasing power of this target group.

This means that buying a house in Spain is still a good investment, but as you can see, three things are very important: location, location and location! So, besides the personal issue of whether a location appeals to you, it is also good to look into the popularity of the area and to what extent a region is sensitive to economic influences.

Wondering which areas to look at for a good investment, or have another question? Get in touch or fill out a Property Finder Service.

Source: TINSA

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