The housing market saw an average price increase of 4% in 2023, a year defined by higher interest rates that moderated the surge from the previous year and extended a decade of gains, according to data published Thursday by the National Statistics Institute (INE).
In the first quarter of the year, housing prices rose 3.5% year over year, followed by 3.6% in the second quarter, 4.5% in the third, and 4.2% in the fourth, confirming price stabilization. Prices continued to rise even as the housing market experienced a slowdown in transactions and mortgage activity in 2023 due to higher rates.
However, the annual average increase for 2023 was 3.4 points lower than 2022, when prices rose by 7.4% on average, the largest advance since 2007, a year when the increase almost reached 10%. Excluding 2022 data, 2023’s rise was the largest since 2019, the year just before the pandemic, when prices climbed 5%.
Continues rising since mid-2014
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With this new increase, housing prices have risen uninterrupted since the second quarter of 2014. That upward path resumed after six years of decline, which began in the second quarter of 2008 following the housing bubble.
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According to INE’s historical series, earlier booms saw quarterly rises reach as high as 13% during peak periods.
Yet since those years, price growth has not returned to double digits, though 2022 still posted a 7.4% average increase—its strongest since 2007, when the rate was 9.8%.
On a quarterly basis, the third quarter of 2012 marked a historical low with a 15.2% decline.
New housing up 8%, a high unseen since 2007
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By property type, new homes led the price increase in 2023, rising an average of 8% for the year, a level not seen since 2007.
Meanwhile, the price of second-hand housing rose an average of 3.2% in 2023, a drop of 4.1 points from the prior year and the smallest increase since 2020.
4.2% higher in the fourth quarter
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In the year’s final quarter, housing prices climbed 4.2% compared with the same period in 2022, extending 39 consecutive quarters of price gains.
By property type, new housing posted the strongest quarterly increase at 7.5%, while second-hand prices grew 3.6%, continuing a growth trend since the second quarter of 2014.
Looking at the previous quarter, third quarter data show a seasonal decrease of 1.1% in the quarterly rate from October to December.
New homes accounted for most of the adjustment, falling 1.4% compared with the prior three months, while used housing eased by 1%.
Regionally, housing prices posted positive year-on-year rates in all autonomous communities during the fourth quarter of 2023.
The largest price increases occurred in Andalucia (5.3%), Navarra (4.7%), and canaries and the Community of Madrid (4.5% each). The smallest increases were seen in Castilla-La Mancha (2.1%), Extremadura (2.2%), and Galicia (3.4%).
The data used to calculate the INE Housing Price Index comes from the General Council of Notaries, with whom a collaboration agreement was signed to facilitate Notaries’ data use for statistical purposes.