The Spanish housing market is on the eve of significant changes. With 2024 in full swing, experts take a look at the future trends and predictions that will shape the industry.
This article focuses on the main factors that will influence property prices and market dynamics in Spain. It is based on recent analyses and reports consulted by the newspapers 20Minutos, El Economista, and the real estate platform Idealista.
After a 2023 marked by inflation, the rise of interest rates, and high housing prices, 2024 seems to be taking the same path when it comes to the price of real estate. According to Idealista data, the price per square metre in Spain is €2,049/m2 (January 2024. This is 0.4% more than in December of the previous year and 8.2% more compared to January 2023.
Access to homes
Regarding access to housing through mortgages, it is predicted that the stabilisation of interest rates will help banks to stabilise or slightly reduce the access conditions for their mortgage loans. Although it is expected that financial institutions will maintain “a cautious attitude” towards market evolution and interest rates before defining a general trend.
Mixed mortgages remain dominant, given their advantages in the above context. Consequently, 2024 will present itself as a year of slight upturn in the granting of mortgages and house purchases. In any case, this remains dependent on inflation and market developments.
Prices may continue to rise
These are the short-term forecasts for purchasing homes and taking out mortgages. The price evolution seems to follow a different path. The general prediction is that property prices in Spain will continue to rise in the coming years. This will mainly be the result of the lack of accessibility to housing for young people due to the high prices. In addition, there is a serious shortage of workers for the construction of new homes. The Asociación de Promotores Constructores de España (APCE) warned about the latter, as cited by El Economista. In addition, the labour shortage will be exacerbated by the retirement of many workers. This indicates that the solution to this problem would lie in the “industrialisation of construction processes”.
Excessive price increases in the longer term?
Analyses on the Spanish housing market consulted by El Economista are also concerned in tone. It is expected that housing prices will rise excessively in the next five years. This trend is attributed to a combination of factors, some of which have already been mentioned above. This includes a limited supply of new homes, increasing construction costs, and persistent demand that exceeds supply capacity. Experts cited by El Economista emphasise the need for policymakers to intervene. They should take measures that encourage the construction of affordable housing, thus ensuring the accessibility of housing to a wider public.
However, looking to the near future, Bankinter’s forecasts suggest that the price of housing will fall by 2% in 2024, but will rise again by 1% in 2025.
Also read: These are the predictions for the Spanish housing market in 2024
