REAL ESTATE – MARBELLA WOHNEN – Is 2023 a good time to buy a house in Spain?
Is 2023 a good time to buy a house in Spain?
The Spanish real estate market has clearly entered a phase of slowdown, especially with regard to used housing. The lower economic growth, the rise in interest rates and the reduction in savings accumulated during the pandemic announce a reduction in the demand for housing by families in 2023. In this context, analysts expect prices to stagnate, which will remain at levels similar to 2022 to return to moderate growth in 2024.
The purchase of a home has a great impact on the financial health of any family and in 2023 there are several aspects to take into account before making a decision:
1.- The greatest opportunities will be in used housing. The experts consider that it is in this segment where the price may show some correction in 2023 and, therefore, there may be a greater supply than today, when it is relatively scarce.
2.- The supply of new housing in 2023 will be very low, especially in areas where economic activity is concentrated. New housing is sold off-plan and currently practically everything that is built is sold, so the downward pressure on the price that could come from excess supply will be reduced. Therefore, those looking for a new home will have to be aware of new developments, because the sale will be relatively fast.
3.- Nowadays, given the general increase in the price of energy, it is important that energy efficiency criteria be taken into account when purchasing a home. In this sense, new housing usually wins over used housing.
4.- Another aspect to consider is the reform that many used homes require. If the cost of the rehabilitation is very relevant, especially in the current context of rising prices of raw materials, it is necessary to compare the price of the new house versus that of the used one plus the cost of the reform.
5.- If we talk about location, in a time of economic slowdown like the current one, both on a national and European scale (where the main home seekers in our country come from) it is expected that the regions where the second residence is most relevant and foreign operations are those that could present better opportunities. In fact, home sales to foreigners in the fourth quarter of last year already began to drop significantly in some autonomous communities after several quarters of uninterrupted growth.
6.- In 2023, thanks to the accumulation of savings during the pandemic, some families could afford to pay for a large part of the house (or all of it) without having to resort to a mortgage loan. Housing can thus become an interesting investment alternative, given the scarcity of rental supply in Spain. However, at this point the uncertainty surrounding the final text of the Housing Law could be holding back the decisions of small and large investors.
It must be borne in mind that the forecasts do not point to large price corrections in 2023, in fact in the aggregate the price could remain relatively constant compared to 2022. The reactivation of the economy in 2024 and the scarcity of supply could make the housing revalue again in 2024, although at more moderate rates, around 2 or 3%”.
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