CaixaBank’s housing outlook through 2023 is analyzed with attention to trends in prices, sales, and market participation. The bank’s forecast suggests a year of stability, with prices holding steady and transaction activity staying within a modest range. In 2022, the housing market experienced strong activity, with around 650,000 transactions recorded. However, the December period showed a notable slowdown, hinting at softer momentum in the months ahead. According to Judit Montoriol, senior economist at CaixaBank Research and coordinator of the housing industry report, the year 2023 is expected to close with about 480,000 sales, a level above many historical averages but lower than the very strong 2022 performance.
The institutional view also anticipates that overall home values will not undergo drastic declines, but rather a gradual normalization. The forecast points to a price adjustment that differs between new and pre-owned properties. A more pronounced correction is expected in the second-hand segment, while demand for new construction may stay firmer. In that context, the risk of a sharp market correction appears to be limited.
Foreign buyers played a notable role in 2022, a trend CaixaBank highlights as a factor shaping regional dynamics. They reached a record share with about 95,000 transactions, representing roughly 15% of total activity. The impact of foreign demand varies by market, with areas such as Alicante, the Balearic Islands, and the Canary Islands absorbing a substantial portion of these purchases, approaching half of all transactions in some cases.
Mortgage Burden and Affordability
A key metric for measuring housing market health is the mortgage burden—the portion of household income allocated to loan repayments. Recent Bank of Spain data indicates an “acceptable” level near 33.6% for CaixaBank’s portfolio. The outlook suggests this ratio could rise as interest rates move higher, potentially reaching around 38%. That shift would become a central factor influencing buyer activity and the pace of sales. If prices ease, the downward pressure is expected to intensify later in the year.
CaixaBank’s early-year projections also show scenarios where the 38% threshold could be reached, based on analysis conducted in mid-December last year. Market observers warn that a rise beyond 35% is a warning sign for affordability, a level historically associated with elevated risk during housing cycles. In past periods of price volatility, affordability stress has occasionally climbed above 50% in peak moments, underscoring the fragility of cycles when rates move higher.
In the current environment, many families continue to prioritize mortgage payments, a trend that has persisted since the middle of the previous year. As rates rise, there is noticeable evidence of early debt repayments, a dynamic that CaixaBank notes as part of the evolving debt service landscape. This behavior reflects households adapting to tighter financing conditions while maintaining their housing commitments.