Mortgage reviews show a sharper drop in housing activity, with overall declines nearing 21 percent and up to 273,000 transactions across the first nine months of 2023. The appraised value also slipped by 19 percent, a trend reported by the Spanish Association for Value Analysis, which encompasses 22 firms representing about 86 percent of all operations in the sector.
The downturn became more evident in the third quarter as summer momentum and holiday demand faded. The association’s general secretary, Paloma Arnaiz, cited uncertainty about future interest rates as a key driver of this slowdown in mortgage activity and property valuations. She noted that appraisal levels are expected to stabilize gradually, with a cautiously optimistic outlook for interest rates in the coming months.
Even with the overall decline, demand for valuations did not disappear entirely. Financing costs played a role in dampening sales, yet the average appraisal value for higher-end homes rose by 2.8 percent to 236,000 euros. This indicates that properties with greater values were still being assessed at elevated levels during the first three quarters of 2023 compared with previous years. In the project segment, mortgage appraisals fell by 38 percent to 5,100 assessments, while the total value of those appraisals rose by 2.3 percent. For rehab properties, valuations dropped 28.4 percent to 586, yet the total corresponding valuation increased by nearly 80 percent, underscoring a shift in market composition toward higher value work even amid weaker activity.
Overall, appraisals for housing and mortgage purposes declined by 14.5 percent in the period, a drop of 18 percent when looking only at the third quarter figures, resulting in a 7.6 percent decrease in total valuation activity. Across the market, AEV members completed roughly 753,000 full appraisals through the end of the third quarter of 2023, which is about 11.7 percent below the level achieved in the previous year.
When examining the aggregate appraisal value, there was a 4.8 percent reduction, with the total reaching up to 273,000 million euros. Financial institutions conducted 10.5 percent fewer valuations for accounting purposes tied to real estate portfolios, and overall transactions numbered 257,000, reflecting a 2.5 percent drop in total valuation value.
Valuations broken down by purpose show mortgage valuations accounting for 58 percent, accounting valuations by financial institutions at 34 percent, and roughly 8 percent attributed to other purposes such as advisory and expert work. These proportions highlight how the mortgage sector remains a major driver of appraisal activity even as the market cools, underscoring the need for clear valuations in a rapidly shifting lending environment. Citations and context provided by the Spanish Association for Value Analysis corroborate these trends through the first three quarters of 2023.