2022 will
go down in the record books as one of the years when real estate values rose
the most in Spain. However, in Q4, prices dropped somewhat and have continued
to fall this year across the country, bar some exceptions. Costa
del Sol property prices are one of them – in this part of Spain, prices
continue to go up.
Record increase in 2022
Data from the Spanish Institute of Statistics (INE) reveals that property prices rose by 7.4% in Spain in 2022. The increase represents the highest for the last 15 years in the country. In addition, it confirms the consolidation of the market after the pandemic.
Values for new-build homes rose by 7.9% and those for resale properties by 7.3%. Both figures are the highest since 2007, the height of the last property cycle. However, price trends were not uniform throughout the year, and most areas of Spain saw a downward turn in the second half of 2022.
Reverse trend in Q4 2022
According to INE, prices fell by 0.8% between Q3 and Q4 on the back of the rise in mortgage interest rates and the subsequent dip in demand. Most regions in Spain registered a decrease, with some, such as La Rioja and the Basque Country, experiencing a drop of over 1.5%.
In Andalusia, prices fell marginally in Q4, although pockets within the region showed the opposite trend. For instance, on the Costa del Sol, property prices rose by 2% compared to Q3, bringing their annual uptick to 8.5%.
Trends in 2023
At the start of the year, analysts predicted a moderation in property values in Spain, with most forecasting increases in the region of 1 to 2%. The rise will be below inflation in most parts of the country, translating to a decrease in real terms.
Property prices nationally
The latest reports for Q1 point in the same direction. For example, the Tinsa quarterly market report based on valuations found that Spanish property prices went up by 6.3% in the year to March but by just 0.9% compared to Q4 2022.
Tinsa attributes the slowdown to the continued rise in interest rates but points out that Spanish real estate continues to be a popular vehicle for savings.
Costa del Sol property prices
However, some parts of the country continue to register different trends including southern Spain. The latest property report from the OMAU in Malaga, the capital of the Costa del Sol, reveals that on this stretch of coastline, property prices are way ahead of those nationally.
In Q1 this year, real estate values on the Costa del Sol rose by 4.16%, more than quadruple the national rate. According to OMAU, this uptick takes the annual increase into double figures. It also confirms demand for property in the area, particularly from foreign buyers.
Marbella led the Costa del Sol in quarterly price upticks with a 5.6% increase between December 2022 and March 2023. The latest rise brings the average square metre price in the resort to €5,501, the highest on the Costa del Sol.
Property prices in Mijas and Fuengirola also went against the national trend, registering increases of 4.11% and 3.18%, respectively. All resorts on the western Costa del Sol, except for Benalmadena and Manilva, now have values of over €3,000 per square metre.
(Sources: INE, OMAU)
