The year 2023 proved a challenging stretch in the housing market. After a dramatic surge in 2021 and 2022, the early months of the following year saw signs of cooling, with sales and price gains slowing down in 2024 as forecasts suggested a continued moderation.
In 2022, closures reached 649,494 sales, a 15% rise from 2021 and a record not seen since before the financial crisis. While 2023 data were delayed by two months, forecasts suggested the year could close lower. Conversations from economists pointed to a gradual decline in transactions in the coming months, with an approximate finish near 550,000 sales and purchases. Analysts noted a return toward Spain’s historical averages, with volumes resembling those in 2018 and 2019.
Even as transaction levels cooled, housing prices moved higher. The market saw a nearly 5% price rise in 2023, though this represented a slowdown from the 7% increase recorded in 2022. Valuations from UVE suggested a price revaluation range of 0% to 2% for 2023, corroborated by data from the College of Registrars. However, multiple data sources, including the Ministry of Housing, Registrars, and real estate portals, pointed to softer gains. Fotocasa spokesperson Maria Matos noted that averaging interannual changes for 2023 (excluding December) yields about an 8.8% increase, with November data highlighting ongoing price growth. The second-hand market posted about a 6.2% uptick.
Looking ahead, Matos projected a rise in early 2024 followed by possible declines in some regions due to a high comparative base and shifts in demand, with tourism dynamics contributing to the uneven regional picture. After a peak surge of roughly 10% in mid-2023, prices were expected to retrace to starting levels, according to Fotocasa’s interpretation of the data.
CaixaBank Research observed that higher interest rates are gradually filtering into the real economy. Rates, at their highest in 15 years, are expected to influence house prices with a delay. The housing market’s valuation by free-market indicators was predicted to slow to around 1.4% in 2024, a pace that would trail inflation, which could exceed 3%. In scenarios where new construction gains momentum, some observers foresaw modest real-term growth.
UVE Valuations acknowledged cautious projections, suggesting moderate declines across Spain as a whole, with more pronounced dips in tourist hubs and larger cities. The overall picture remained nuanced, with no expert expecting steep nominal price drops. Inflation uncertainty—driven by energy prices amid geopolitical tensions—was highlighted as a key unknown for 2024, with some analysts expecting nominal gains around 1.4%, potentially below inflation.
Will 2024 see more or fewer homes sold? The consensus pointed toward a continued but limited decline in sales, tied to cooling demand from higher financing costs. Projections varied: CaixaBank Research cited a pace approaching pre-pandemic levels around 510,000 transactions; Fotocasa offered a lower scenario near 420,000, while UVE Valuations remained comparatively optimistic at about 540,000.
Analysts emphasized that the overall market would not see dramatic price declines. Employment resilience and renewed household purchasing power were expected to sustain activity, even as inflation cooled. Crystallizing the outlook, Cristina Arias explained that the easing inflation and still-at-high-rate environment should support a gradual recovery in demand, though price movements would remain restrained.
Spain’s housing market has shown itself to be adaptable, enduring shifts in macroeconomic conditions since the pandemic. Prices have moderated after a period of rapid gains, and demand is becoming more selective, with pockets of strength in new construction and rental segments while many rural areas experience steadier prices. Nationally, activity has gradually moved back toward pre-pandemic levels, though regional variations persist due to differences in financing, supply, and local demand.
The sector remains influenced by a strong labor market, migration trends, a gap between limited new housing supply and persistent demand, and relatively healthy household finances. The prevalence of fixed-rate mortgages in recent years helps cushion some impact from rate increases, contributing to more stable debt dynamics.
Overall, housing continues to be a fast-moving market. Some urban cores and growth areas maintain upward price momentum, particularly in new builds and rental segments, while large swaths of the country show steadier or slower price evolution. On balance, the national trend is a gradual normalization rather than abrupt shifts seen elsewhere.