Forecasts for Spain’s housing market point to regional differences in 2023
Early warnings in 2023 suggested declines in housing prices in certain markets. According to a forecast model from the appraisal firm UVE Valoraciones, price drops are expected to be most pronounced along the coast. The analysis notes that the largest declines will occur in provinces with a tourism-heavy economy, with Alicante as an exception, especially where there are negative expectations about economic progression.
By province, expectations show Castellón could see property prices fall roughly between 0.3 and 5.3 percent; Tarragona might experience a change of about 0.3 to 4.4 percent; while Malaga could oscillate from a 0.9 percent rise to a 3.4 percent decline.
Overall, the study describes a scenario of a nationwide housing bubble but acknowledges that this view coexists with evidence of smaller domestic real estate fluctuations. It also highlights a likely trend toward price stability when considered in nominal terms across the country.
The final outcomes range from a 2.52 percent price decrease under the most pessimistic assumption to a 2.30 percent increase under the most optimistic scenario. With a 4 percent inflation forecast, actual market behavior would still trend downward. The largest predicted decline for any market is 6.6 percent, which is not seen as a catastrophic shift.
Madrid faces a downturn
The analysis, aligned with the national ECO/805/2003 framework for forecasting disruptions in the real estate sector, identifies Madrid as the sole city among those surveyed where the model anticipates a price decline under both optimistic and pessimistic scenarios. If economic conditions deteriorate more than expected, the municipal decline could range from 0.2 to 6.6 percent.
One notable detail is that, even with a negative outlook for the capital, nearby areas do not share the same pessimism. The report emphasizes that the regional performance of Madrid as a whole could be stronger than the capital itself.
UVE Valoraciones stresses that the forecasting model, which incorporates factors such as household income, employment, and financing conditions, yields highly variable results for large cities like Barcelona, Malaga, and Valencia. This suggests that price movements in these areas are more tightly linked to the broader economic situation of their respective provinces.
What about the rest of the country?
The evaluator identifies the fifteen provinces with the most vacant housing as likely to show minimal growth or even a decrease in prices. In the most optimistic scenario, these provinces could see a slight decrease around 2.2 percent, while the pessimistic scenario points to a comparable or slightly larger drop. Provinces cited include Albacete, Ávila, Burgos, Cáceres, Ciudad Real, Córdoba, Cuenca, Jaén, León, Lugo, Orense, Segovia, Soria, Teruel, and Zamora. The report notes that evacuated Spanish provinces tend to exhibit a moderate downward trend in prices regardless of broader economic conditions.
Across Barcelona and A Coruńa, the model predicts price increases under some scenarios but declines in others for Castellón, Tarragona, and Guadalajara. For the rest, outcomes are mixed, showing rises in the optimistic view and declines in the pessimistic one.