Spain | The real estate market, from less to more in 2024

At the end of 2022, the outlook for the residential sector was bleak. It was assumed that house sales and house prices would contract in 2023. Sales fell, but prices rose.. By 2024, the sector is expected to go from strength to strength and to consolidate a change in trend as 2025 approaches.

Key points

• Key points:
• In 2023, home sales amounted to around 640000 homes, which was 11.3% less than in 2022. This is a relatively high volume of sales and above the historical average (between 2004 and 2022, almost 576,000 were sold on an annual average).
• The good performance of the labor market and the availability of savings accumulated by households during the pandemic have contributed to the growth in demand.
• However, several factors explain the contraction in sales. The slowdown in economic growth. The rapid and sharp rise in interest rates that has made financing more expensive. The slowdown in growth in neighboring economies, which has led to a reduction in foreign transactions. Regulatory uncertainty in the sector. And finally, the rise in house prices in some of the most stressed areas has been much higher than the rise in gross household disposable income.
• The sector is expected to recover in 2025. The acceleration of growth in the Spanish economy and the expected reduction in interest rates will allow the demand that has remained bottled up due to high financing costs to flow onto the market. In addition, the recovery of European economies could boost foreign demand for housing.
• At present, the policies that would have the greatest impact on the market and would bring the greatest social benefit would be those that increase the supply of housing, the biggest problem in the Spanish market.

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