ARCHIVED - How much will Spanish house prices drop in 2023?
Everything points to a decrease in demand in Spain and a cooling-off in the real estate market
Spain experienced a property boom during the summer but the real estate sector reported a definite slow-down come autumn, which corresponded with the interest rate hike announced by the European Central Bank. Since then, mortgages have become considerably more expensive and banks have tightened their requirements to secure a home loan.
With this latest data, property experts agree that the price of housing will fall in 2023, but in Spain, there’s also likely to be fewer houses sold since historically, the market shows that people prefer to hold on to their real estate rather than sell it below value.
"The statistics show the beginning of a change in the real estate cycle: the operations boom and the sustained increase in prices are beginning to moderate as a result of the rate hike," explain the specialists at comparison site HelpMyCash.com.
So, how much will house prices drop in 2023?
Sadly, there’s no general consensus on just how cheap property in Spain is likely to become, and BBVA bank and ING are actually predicting a slight increase. However, with the Euribor expected to reach 3% before the end of the year, compared to -0.477% in January, Atlas Real Estate Analytics is forecasting a drop of 0.9% in prices while Bankinter believes houses will be as much as 3% cheaper in 2023.
That being said, in Spain a stronger drop is expected in the number of sales than in the sale value, since most owners are reluctant to accept lower prices. With this in mind, several financial institutions expect around 15% fewer property transactions to take place next year, while real estate company Redpiso expects the number of sales next year to be between 20% and 30% lower.
“Our advice to owners who want to sell their apartment is to adapt its value to market prices. Otherwise, the sale may take much longer than expected.”
Another recommended option is to sell before the end of this year when prices will drop even further, and the Spanish government tacks on a hike of up to 50% on the already pricey Plusvalia tax for sellers.
Image: Pixabay
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