In January this year, analysts predicted that Spanish property prices would experience little change during 2023. They made this forecast of stabilization in line with slowing demand on the back of rising interest rates. However, recent figures reveal that prices for Spanish real estate continue to rise, with some areas seeing double-digit upticks in Q2 and most areas ahead of inflation.
With this in mind, the property consultant, Euroval, has compiled a report forecasting Spanish property prices for the next two years. It reveals relatively moderate growth for the country generally but with a sharp uptick in certain areas, including the Costa del Sol.
Costa del Sol prices ahead of the rest in Q2
The latest Gesvalt report (Q2 2023) finds that Spanish property prices rose by over 6% in the first half of this year, compared to the same period in 2022. The figure exceeded the rate of inflation by several percentage points.
However, this increase was far from uniform across the country and some areas saw considerably higher upticks. For example, on the Costa del Sol, property prices soared by 12.4% in Q2 year-on-year, over double the national average. The Costa Blanca, with an 11.4% rise, came a close second.
Spanish property prices by 2025
The Euroval report paints a more moderate picture. It predicts a relatively small increase in property values over the next two years. By 2025, it believes prices will go up by 6%, with an average of 2% per year. This forecast would bring the average square metre price in Spain to €1,809, €103 more expensive than at the end of 2022.
However, this scenario will not be uniform and Euroval believes double-digit increases are likely in several parts of the country. “The difference in provincial price performance is considerable,” says the report, “because each province responds to a specific demand dynamic within its market.”
As a result, 28 provinces will see price upticks ahead of the 6% national average and 24 will experience lower increases. In 3, prices will fall over the next two years.
Stellar performers over the next two years
Guadalajara province, to the north of Madrid, will have the highest increase by 2025, according to Euroval. In this part of Spain, property prices will soar by 16.64%. However, despite this uptick, average square metre prices will remain below their record, registered during the last property boom.
Central provinces also occupy the following places in the ranking of Spanish property prices in 2025. In second place is Toledo, with an increase of 15.73%, and Avila and Segovia come in fourth and fifth places, respectively. Real estate buyers can expect double-digit price rises in a total of 11 provinces.
More moderate increases on the Costa del Sol
Euroval predicts more stable market conditions for most parts of the Spanish coastline, including the Costa del Sol. It forecasts a rise of 8.46% in Malaga province between now and 2025. This figure is the equivalent of an increase of around 2.8% annually.
However, as the recent surge in demand for Costa del Sol property has shown, some parts can expect considerably higher price hikes. They include Estepona and Marbella, both areas where supply currently lags behind demand.
(Source: Euroval)
