Most analysts point to a moderation in Spanish real estate prices during 2024. However, not all parts of the country will experience this trend. On the contrary, areas sought-after for their tourist attractions and second-home appeal will see the opposite tendency. Property on the Costa del Sol is one such area, forecast to see higher property price upticks than Spain generally.
Spanish real estate prices in 2023
The most recent data points to increases of between 2.1% and 8.15% last year. The property portal Idealista reports the highest price rises, with an 8.15% uptick. Fotocasa, another property portal, comes close behind with 7.4%.
Data from valuation companies offers more conservative increases. For example, Tinsa reports a general rise of 4.1%, on a par with the inflation rate. However, Gesvalt data suggests prices barely rose by more than 2%.
As a result, analysts believe the market is currently in a stabilisation phase and will see moderate upticks this year. They base this forecast on the slowdown in the trend over the last few months.
Spanish property prices in 2024
Nevertheless, the same analysts also point out that the Spanish market runs at different speeds according to the area. House price trajectories depend on location, tourism activity, business dynamics and the size of a destination. Consequently, places like Valencia, Almeria, Santa Cruz de Tenerife and Malaga led Spanish real estate prices last year.
Price rises in employment hubs
“The property supply in employment hubs and areas with high economic activity has yet to satisfy demand,” says Cristina Arias, Director of Research at Tinsa. “This situation puts pressure on prices and maintains their upward trend.” She adds that markets with buyers with high purchasing power are the most resilient.
Price rises in areas with solid demand
The valuation company Grupo Tecnitasa agrees with this analysis, particularly when it comes to new-build property. “There are significant differences between areas such as Madrid, Malaga and San Sebastian, with huge pressure on the new-build market, and inland provinces in regions such as Castilla la Mancha or Extremadura,” said José Antonio Muro, Director of the company.
CaixaBank Research concurs, adding that the consolidation of tourism adds fuel to Spanish real estate prices. Spain welcomed a record number of tourists in 2023 and may overtake France to become the world’s most-visited country.
“Tourism will continue to attract people to the most popular areas, meaning that prices in these markets will stay on their upward trend,” said Judit Montoriol, Chief Economist at CaixaBank Research.
Higher prices on the coast
Some analysts point to a slowdown in Spain’s largest cities, with prices rising more slowly or even falling because of the high proportion of buyers needing a mortgage loan. However, this trend will reverse in coastal areas.
“Here, most purchases are cash transactions and interest rate rises have little effect on purchasing power,” said Germán Pérez, President of UVE Valoraciones. He also points out that demand in coastal areas such as the Costa del Sol, the Balearics and Costa Blanca is mostly foreign. As a result, he predicts Spanish real estate prices will go up in these areas this year.
In late 2023, property prices on the Costa del Sol reached their highest ever, a trend mirrored by rental rates. Marbella and Benahavis had the most expensive homes on the market.
(Source: La Opinión de Málaga)