The Spanish real estate sector managed to resist the rise in interest rates in 2023 “better than expected”, with strong job creation, with a total of 783,000 more employed people, and immigration flows -800,000 people-, the two largest causes that contributed to maintaining the demand.
This is stated in the ‘Real Estate Sector Report’ by CaixaBank Research. According to the analysis, which the financial institution made public this Monday, to these two factors is added the financial situation of households, “less stressed than expected”, resilience of the sale and purchase of foreigners and the stabilization of construction costs
“These are the five supporting factors that have sustained housing demand and have mitigated the negative impact of rising rates on housing prices,” the authors of the study indicate. “These factors have sustained the demand for housing and have mitigated the negative impact of the increase in interest rates,” indicates CaixaBank, despite the fact that home purchases fell by 9.7% in 2023 to 587,000 units, a figure higher than pre-pandemic levels (+16.1% compared to 2019) and the historical average (470,000).
By segment, the greatest adjustment is concentrated in second-hand home purchases (-10.8% in 2023 compared to -4.8% for new home purchases), while in new homes it represented 17.9%. of total purchases (20.1% in 2022).
About prices
Madrid, Barcelona, Valencia, Alicante and L’Hospitalet de Llobregat (Barcelona) are in the ‘top 5’ of municipalities in which the population increased the most, 2.7% on average, which translated into an increase of housing prices, an annual average of 6.4% annually between the third quarter of 2021 and the third quarter of 2023,
Looking ahead to 2024 and 2025, the outlook is positive “due to the strength of the Spanish market, the improvement in economic prospects and the expectation of a decrease in interest rates”, according to the entity.
