2023: What can we expect from the Spanish real estate market?
After having seen a year of real estate ‘boom’ where more second-hand homes have been sold than ever with inflation that rose to almost 10.4% in August, the market has peaked and has begun to show signs of slowing down during the last quarter of 2022. This indicator already gives us clues about the trends and new patterns that will be seen in the market during 2023.
The new parameters are going to cause demand to experience a sharp drop, which will create a continuous drop in prices in the real estate market.
The three main causes of the falling demand are the fear of a crisis that has been heard for months, the inflation suffered by the vital costs per family and the increase in the cost of mortgages with an interest rate of 3% and a rise from Euribor to 3.5% will lead those with mortgages to pay up to more than 4% on their variable mortgages.
These factors are not going to affect the entire market in the same way since there are some clear exemptions. New construction homes were already a rare commodity in 2022 and will continue to be so in 2023. This meant that many buyers had to resort to second-hand housing in order to have more options. This shortage causes demand to continue to rise and therefore resist the fall.