REAL ESTATE – MARBELLA WOHNEN – New construction homes: this is how demand and prices evolve in 2023

New construction homes: this is how demand and prices evolve in 2023

Inflation, the increase in interest rates and the increase in energy and materials determine the expansion of new construction

Despite the turbulence that reaches the real estate horizon, such as increases in interest rates or inflation, the new construction housing market will continue to show muscle and will have a stable outlook with an upward trend.

Based on our analyses, this segment will be one of the most attractive options for future homeowners as well as investors.

Although the demand will continue at the same level as in 2022, buyers will look for alternatives that fit their budgets, and that also take into account factors such as sustainability or the facilities to access credit.

Rising prices

The prices of new construction have exceeded the inflation registered last year. According to the Appraisal Society, the average price rose by 7.1%, reaching 2,732 euros per m2 in Spain.

The prices of new construction have exceeded the inflation registered last year

But there are cities where this price doubles or triples, as in Marbella. There the average price is 5,428 euros/m2, but for new-build homes it is reaching 8,070 euros/m2, an increase of 15% compared to 2021.

Why do prices go up?

The reasons for these intense increases are due to the shortage of new construction homes in areas of great demand.

In addition, due to the increase in the prices of materials, the increase in energy and the cost of labor, many owners and investors give up on renovation projects and turn to new works, which increases their demand.

We know that the scarcity of this type of property has led to a “shrinkage” of the market over the past year, with further pressure on prices.

And given that in Spain “not enough homes are being built to meet demand”, we believe that the market will follow this path throughout 2023.

Demand slowdown

On the other hand, we consider that the increase in interest rates will lead to a slowdown in demand during this year, so it is possible that the number of operations will decrease.

The increase in interest rates will lead to an increase in prices, but it will be somewhat more moderate than last year.

To moderate this rise is that there is a greater supply of new housing on the market. For this, it is key that there is a “liberation of the land”, as well as legislative changes that adapt to society and speed up urban planning procedures and the granting of licenses.

Meanwhile, prices will follow the path of inflation and the behavior of interest rates, where the key will be how much the materials for the works will cost.

This will slow down the pace of new construction homes, and given the demand, the price will remain stable for the remainder of the year.

Stay up to date on real estate investments here

When buying a home, it is advisable to seek advice from a real estate expert, such as Marbella WOHNEN, who will help you throughout the process and eliminate any doubts you may have.

Marbella WOHNEN Immobilien

Contact