House market in Spain showing signs of recovery

Showing signs of recovery in the housing market Credit: Creative Commons

The housing market in Spain, which has been slowing down, showed signs of improvement in January after declining for 12 consecutive months.

The latest data from the National Statistics Institute (INE) indicates a decrease of only 2.1 percent compared to the same period last year, marking a turnaround from the end of 2023 when the decline was more pronounced.

Although home sales have been declining year-on-year for the past year, property prices have not been significantly affected. However, fewer purchases can be attributed to stricter conditions for mortgage loans imposed by banks, along with the sharp increase in Eurozone interest rates since late 2022, making mortgages more expensive.

Increasing sales

Despite the ongoing decline, January 2024 saw the second-highest number of home sales since 2009. This increase in sales, especially for new builds, has sparked optimism among estate agents, although concerns remain about the sustainability of rising prices for new developments.

In terms of regions, eight out of 19 reported an increase in residential property purchases in January, with the most significant rises observed in central and northern areas. Andalucía recorded the highest number of home sales, followed by Catalunya and Valencia.

Cash buyers driving the market

The property market is currently driven by cash buyers due to the impact of rising Euribor rates on mortgage-dependent buyers. However, there’s hope that the situation may improve as the European Central Bank considers scaling back rate increases from June onwards, potentially stimulating home sales.

There is cautious optimism among estate agents that the housing market could see a boost in the near future, particularly if mortgage rates become more affordable.

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Written by

Julian Phillips

Born in the UK, has lived in 9 countries, before finally coming to Spain in 2015. Currently living in Almeria and working out of the EWN office in Mojacar.

Comments


    • Martin

      01 April 2024 • 11:14

      No mention of the 90-day rule putting people off buying.

    Comments are closed.