Strong demand continues but fewer properties for sale

According to Fotocasa Research’s report ‘Radiography of the real estate market in the second half of 2023‘, there is a great imbalance between supply and demand for property: 77 per cent want to buy compared to just 17 per cent who are putting their homes on the resale market.

This imbalance is closely related to the significant increase in house prices in Spain, particularly in the most sought after areas which includes the Costa del Sol. According to the Fotocasa Real Estate Index, the average square metre price reached over €2,000 in February 2024, registering a year-on-year increase of 7.1 per cent.

“Purchase prices are once again rising significantly. Demand continues to put pressure on supply so waiting for prices to fall and find a good opportunity is not going to be the best strategy” explained María Matos, Director of Studies and spokesperson for Fotocasa.

In total, 586,913 sales and purchases were made in 2023, the second best figure since 2007. However, the latest data on real estate transactions for the month of December 2023 released by the National Statistics Institute (INE) showed a monthly decrease of 21.7 per cent, reflecting the lack of supply.

After the ECB’s statements opening the door to a cut in interest rates before the summer, the demand for purchases could be even stronger in the coming months, which would once again push up house prices.