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Is now a good time to buy property in Spain?
Real estate experts believe the housing market in Spain will remain stable throughout the summer of 2023
Although inflation remains high across Europe and variable mortgages are set to become even more expensive thanks to another ECB rate hike, Spanish property is still in demand, but is the summer of 2023 a good time to buy?
Most of the experts agree that the housing market should remain relatively stable over the coming months, with the exception of the most sought-after tourist destinations like the Mediterranean coast and the islands, where property prices will always be a little bit higher.
In general, the cost of houses increased by just 0.6% in the first quarter and the news is even better when the year-on-year prices are considered; here, growth has slowed down to 3.5% compared to 5.5% in 2022.
This trend strongly indicates that housing prices will remain stable throughout 2023. More pronounced inflationary pressures and the erosion of household savings, coupled with rising interest rates and the increased difficulty of getting a mortgage all contribute to dampen demand for housing.
So what does this mean for the rest of the summer? Well, this softened demanded could see price increases in 2023 of up to 2%. In addition, interest rate increases are reaching the maximum set by the ECB for this year, 3.75%. That means the new increases to be applied will be 0.25 basis points each – less than one point.
Essentially, as interest rates and inflation continue to rise, which they almost certainly will do, demand for homes in Spain will drop. And as demand falls, so too must the prices.
The cheapest places to buy in 2023
Generally speaking, property prices in the large cities are lower than along the Mediterranean coast at the moment, but even in these high-demand areas housing costs differ widely. In Castellón, for example, the price per square metre is 1,328 euros and 1,465 in Murcia, while a home in Palma de Mallorca will set buyers back 3,966 euros per square metre and 2,989 in the ever-popular Malaga.
As for the Canary Islands, prices vary from 2,365 euros in Las Palmas to 1,961 euros per square metre in Santa Cruz de Tenerife.
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