The year 2023 marked a downturn in Spain’s housing market. Total registrations of housing purchases and sales between January and May fell by 4 percent when compared with the same period in 2022, according to the National Institute of Statistics. During the first five months, there were 261,784 housing transactions recorded, versus 272,922 in the prior year.
The trend did not unfold uniformly across the country. Seventeen autonomous communities including Ceuta and Melilla saw decreases, while two regions remained largely stable and two others experienced noticeable growth.
The region with the largest drop in transaction volume was La Rioja, where activity fell by 19.68 percent. Madrid followed with a decline of 13.23 percent, and the Balearic Islands registered a 16.86 percent drop, all showing double-digit decreases. Other communities also saw declines, though not as steep: Galicia fell 9.72 percent, Castilla La Mancha 8.13 percent, Melilla 5.86 percent, Ceuta 5.22 percent, the Canary Islands 4.95 percent, Aragon 4.46 percent, Andalusia 4.63 percent, Catalonia 3.25 percent, Navarra 3.13 percent, and Cantabria 2 percent.
In contrast, the regions of Asturias, the Valencian Community, and Castile and Leon showed increases when comparing January to May 2023 with the same period in 2022, with activity up by 10.22 percent, 5.92 percent and 2.37 percent respectively. In Murcia and Extremadura, the figures for this year closely mirrored those of 2022.
Is the decline uniform across provinces?
Provincial trends varied significantly. Avila stood out with a 32.82 percent rise in sales from January to May 2023 versus 2022. On the other side of the spectrum, Huesca experienced a steep fall, with residential real estate transactions dropping 22.89 percent.
Beyond Avila, several provinces posted notable double-digit increases: Segovia rose 17.68 percent, Zamora 16.78 percent, Teruel 11.54 percent, and Asturias 10.22 percent. Conversely, besides Huesca, the sharpest declines occurred in La Rioja at 19.68 percent, Guadalajara at 17.83 percent, the Balearic Islands at 16.86 percent, Zamora at 16.78 percent, Lugo at 16.45 percent, and Álava at 15.73 percent.
Should the sales drop worry buyers and sellers?
Sales activity in 2021 and 2022 was higher, and recent figures even approach the levels seen during the real estate boom of 2007. The shift in monetary policy by central banks, with rising interest rates, has a direct impact on the housing market by making financing more expensive. This tends to deter buyers who rely on debt to acquire properties.
Real estate portals such as Fotocasa suggest comparing 2023 figures with those from 2019, the year before the pandemic, to gain perspective. They note that in May 2023, trading activity was about 16 percent higher than in May 2019 for the same month. Across January to May 2023, 261,784 transactions were recorded, while 224,581 houses were sold during the first five months of 2019. This comparison indicates that 2023 began with vigorous and positive data, highlighting the sector’s resilience amid economic volatility.