House price deceleration in February 2023

According to the Tinsa Imie General and Large Markets index, the price of new and used housing increased by 6.4% year-on-year in February 2023, although it slowed compared to January.

The adjustment was greater in the Mediterranean area, with a fall of 0.8% with respect to January.

In large cities and metropolitan areas, prices barely changed, with a monthly decline of 0.1%.

New and used housing recorded a cumulative decline of 20.9% in February from the highs reached by the General Index in the second month of 2008.

The Spanish Association of Value Analysis, together with the University of Alicante, has stated in a report that the price of new housing will rise by around 4% during the first quarter of 2023 and will then moderate, with rises of around 2%. In addition, some of the panellists consulted specify that the effect of inflation must also be taken into account in the evolution of prices, as this would imply that in real terms the price of housing would be getting cheaper.

Almost half (42%) of the experts consulted for this study foresee an increase in prices due to the lack of developer activity and the increase in demand.

As for the future outlook for the Spanish real estate market, opinions are mixed. Some economists predict that the real estate market will eventually cool as prices continue to rise faster than incomes. Prices are clearly accelerating at a worrying rate according to Ken H. Johnson, a housing economist. Doug Duncan, chief economist at mortgage giant Fannie Mae also acknowledges his concern about the stability of the housing market. Other experts, however, believe that there is still room for further increases before the ceiling is reached.

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