The rise in interest rates and the subsequent surge in mortgage costs have created a restrictive cycle within Spain’s housing market. A balance between average home prices and the debt capacity of buyers, considering typical incomes, is captured by a metric known as the accessibility index. Prepared by the Valuation Society, this index gauges how attainable a home is for the average citizen. It shows that purchasing a home in Spain has become significantly harder since 2012. Since beginning its decline in the third quarter of 2021, the index has continued its downward trajectory into the latest quarter. Starting at a baseline of 100 points, it stood at 74 in September, marking a 25-point drop year over year and a 5.1 percent decline from the previous quarter. In percentage terms, this represents a 25.3 percent year-over-year decrease and a 5.1 percent quarter-over-quarter drop. This reading is the lowest since the second quarter of 2012 when the index reached 71 points.
The data clearly reflect the sentiments of citizens and the industry predictions that have been voiced for months. While general real estate indicators can be volatile, supply and demand pressures vary widely by asset type and region. The Accessibility Index from the Appraisal Association shows a persistently negative trend across the board. Among the autonomous communities, the Balearic Islands, Madrid, Catalonia, and the Basque Country continue to register the lowest accessibility relative to the national average. Eleven of the seventeen communities remain below the 100-point equilibrium level. This means that, for many residents, buying an average home on an average income requires more debt than what is considered reasonable. By contrast, six communities exceed this benchmark, with the Region of Murcia at 113 points and La Rioja and Castilla-La Mancha both at 108 points, indicating relatively better affordability.
Consuelo Villanueva, Director of Institutions and Large Accounts at the Appraisal Association, explains: “The negative trend in this index reflects a tighter monetary policy. This situation, perhaps more than anticipated, has driven higher financing costs and tighter credit conditions from financial institutions.”
What stands out in the current moment is that home prices, whether new or resale, are not wildly expensive but have an annualized rise of around 3.7 percent (compared with 4.65 percent in 2022). This nuance means that the challenge for homebuyers is less about price level and more about financing and debt capacity, which is actively shaping purchasing decisions. A modest improvement in the broader housing environment is anticipated over time.
Price control
Experts suggest that the indicators reinforce the view that prices, particularly for pre-owned homes, are likely to ease in the coming months. The Appraisal Association notes a tendency for prices to drift toward a more moderate increase rather than sharp gains. Each micromarket, however, will chart its own course based on current supply, price bands, and the profile of typical buyers. A reduction in activity will inevitably influence prices, trim the pool of potential buyers, and dampen the pace of primary residence replacements seen in previous years.
The latest figures from the Spanish College of Registrars corroborate the broader trend. In July, total purchases and sales again declined versus the same month a year earlier, marking the eighth consecutive month of retreat after a period of growth that began in March 2020. Of the 96,104 transactions recorded in July 2022, about 87,674 occurred in July this year, a shortfall of roughly 8,400 transactions. Home listings decreased from 51,490 in July 2022 to 45,630 in the most recent July, a drop of around 5,800 transactions.