Differing Price Trends Across Spanish Towns
Spain’s real estate sector is navigating the current slowdown with more resilience than many feared. Both housing supply and demand show unusual dynamics, where higher-priced homes continue to rise and sell, while cheaper options soften as buyers pull back. In a market characterized by high overall prices and higher mortgage costs, real estate agencies note that the most expensive properties remain expensive, and the cheaper ones often attract fewer buyers than expected. This observation comes from the latest Tecnitasa report presented this Thursday.
According to Tecnitasa’s analysis, all major capitals and cities in Spain have seen price peaks rise, except for Toledo and Melilla. Yet these peak prices reveal that only a limited number of young couples can afford their first home. The data show five capitals surpassing 7,000 euros per square meter in average price, up from three four years ago when the threshold was 6,000 euros. Despite a noticeable shortage of affordable stock, intermediaries remain active, driven by buyers replacing homes, foreigners, or owners who shift rental properties to the sale market.
Inmobiliarias such as Amat, which focuses on mid-to-upper segment homes with prices above 600,000 euros on average, report that 2023 activity exceeded expectations and that there is currently no sign of prices easing. Francisco Cruz, owner of CVM Pisos in the Fabra i Puig corridor of Barcelona, notes that some buyers have fallen away due to mortgage hurdles. Sales continue, but more buyers purchase without financing. Refurbished apartments tend to sell more easily, while non-renovated units still offer greater room for negotiation.
Price disparities across towns are substantial. Tecnitasa highlights that the distance between upscale areas like Paseo de Gracia and Tarragona’s Torreforta shows price gaps exceeding 9,500 euros per square meter. The firm’s analysis underscores that location, energy efficiency certificates, and other factors heavily influence listed selling prices, making average figures misleading. For example, a unit in Badalona’s new maritime zone may cost around 5,700 euros per square meter, approximately 541,500 euros for a 95-square-meter, two-bedroom flat on the first floor, compared with 364,500 euros the previous year. Nearby, a 65-square-meter home in the San Roque neighborhood is priced around 75,400 euros.
In Madrid, price differentials between the most expensive and cheapest zones can reach as much as 15,000 euros per square meter, with Recoletos versus San Cristóbal de los Ángeles illustrating a stark gap (roughly 900 euros per square meter in some cases). Servihabitat notes that a limited supply of new-build homes and a shrinking stock of refurbished second-hand housing dampen any potential price collapse, positioning the Community of Madrid as the most stable region, with a projected national average price uptick around 3% for the year, according to the province’s housing market outlook.
Borja Goday, chief executive officer of Servihabitat, reflects that those who expected a dramatic price drop did not anticipate how costly it is to bring new product to market. With new supply not flowing through quickly, upward pressure has grown on the second-hand market, which has also been tightened by post-pandemic buyer demand.
Foreign buyers also shape price trajectories. Guifré Homedes, Amat’s chief executive, observes rising demand from Iranian, Latin American, and Chinese buyers seeking high-end homes with robust quality standards in Barcelona. Technical director Fernando García Marcos of Tecnitasa corroborates that in several cities, prices have risen especially for fully renovated properties with premium finishes, often aimed at foreign buyers with substantial purchasing power. A market report from Engel & Völkers notes that between 15% and 30% of the company’s sales in high-foreign-weight areas exceeded one million euros last year, in zones such as Málaga, Mallorca, Madrid, Barcelona, and Costa Blanca. The forecast anticipates increased transactions in these locales by about 15% this year, alongside a 5% to 7% price rise and roughly a 40% expansion in the high-end foreign buyer market.
Servihabitat also projects a 5% rise in total housing transactions in 2024, reaching about 665,200 deals, with prices up by around 3% thanks to mortgage stabilization. The firm notes that in 2023 the typical down payment effort for home purchase equaled about 7.6 years of gross income, versus 7.8 years in 2022, with the average buyer age around 38.6 years.
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