4 May, 2023 @ 14:15
1 min read

Inflation and higher interest rates cause big fall in home sales in Spain

How much of my salary do I need to put aside for rent or mortgage costs in Spain? Figures reveal HUGE differences between the British expat hotspots|
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HOME sales in Spain showed an annual fall of 11.7% in March according to figures from the Council of Notaries published on Thursday.

The statistics continue a trend that started in late 2022 with increased interest rates and high inflation as the main contributory factors.

A recent study by the Fotocasa property portal suggested that the rise in the cost of living is affecting 59% of potential buyers who are rethinking making a purchase.

63,661 property deals were concluded in March making six consecutive months where sales have slowed down.

In January, transactions fell by 7.3% year-on-year and in February they sank by 13.1%.

Industry experts believe that year-on-year falls will continue for the foreseeable future.

The notary report says that all regions of Spain reported falls with the exception of Galicia which had a 3.8% March increase.

La Rioja reported a 38% drop while in terms of actual buyers falling, Madrid(-22.9%) and Catalunya(-12.5%) suffered the most.

The annual home purchasing fall was less in the Balearic Islands (-16.1%) and the Canary Islands (-17.3%), while Andalucia had a relatively minor decrease of 5.5% year-on-year.

The reduction in the price per square meter of 2.6% year-on-year to €1,580 euros appears not to have tempted potential buyers.

The notaries added that that house price changes in March were very uneven across Spain with prices up in the Canaries by 9.5%, but down in the Balearics by 6.1%.

Ten regions had price hikes as opposed to seven which had a decrease.

Another rising trend is the number of homes being bought without a mortgage- 57.3% in March.

These are inevitably wealthier buyers like investors, especially non-Spaniards- or people who already own a property.

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Alex Trelinski

Alex worked for 30 years for the BBC as a presenter, producer and manager. He covered a variety of areas specialising in sport, news and politics. After moving to the Costa Blanca over a decade ago, he edited a newspaper for 5 years and worked on local radio.

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