Spain's property market has shown resilience since the global financial crisis of 2008, and 2022 was a particularly dynamic year for the sector. Despite concerns about rising energy costs, price-led inflation, and increasing Eurozone interest rates, the Spanish property market is expected to remain strong in 2023. Several trends will continue to drive growth and investment in the market.
Trend 1: Investors See Properties in Key Locations as a Safe Choice
Trend 2: Sales Expected to Slightly Decrease in 2023
ING bank predicts a "cooling down" of the property-buying frenzy experienced in 2022, with a more pronounced slowdown in sales at the beginning of 2023. This decrease in sales is partly attributed to the rise in the Eurozone interest rate (Euribor), which makes borrowing more expensive. However, areas with a higher number of overseas buyers, like the Costa Blanca and Costa Cálida, are expected to be less affected by the economic downturn since many buyers in these areas do not require financing or have already secured borrowing from their home countries.
Trend 3: Potential Slight Reduction in House Prices
Trend 4: Continued Demand from Overseas Investors, Mainly European
One of the key drivers of Spain's real estate market recovery in 2021-2022 was overseas buyers, including British, Irish, and US citizens. While the enthusiasm to invest in Spanish properties may ease off slightly in 2023 due to the economic crisis, Spain remains an attractive investment opportunity. With 90% of foreign buyers being cash buyers, the increase in mortgage rates in Spain will not significantly affect them. For the remaining 10%, mortgage rates in Spain are still relatively cheap compared to inflation. Spain will continue to be viewed as one of the best countries for relocation, remote work, holiday homes, and rental investments in 2023. However, due diligence is necessary when navigating the Spanish real estate market, and working with an experienced estate agent is recommended.
Trend 5: Buy-to-Let Properties Provide a Good Return for Investors
The rental market in Spain is expected to continue growing steadily in 2023, presenting excellent opportunities for investors interested in buy-to-let properties. Popular tourist areas like the Costa Blanca, Costa del Sol, and Costa Cálida offer a wide range of rental properties, including apartments, townhouses, and villas. Investing in buy-to-let properties in 2023 can provide a long-term recurring source of income that offers higher returns compared to other investment sources.
Trend 6: Growing Interest in Sustainable Properties
Trend 7: The Spanish Economy Remains Strong
According to the European Investor Intentions Survey 2023 report by CBRE, Spain ranks fourth among countries providing the highest capital growth. As one of the top-growing countries in Europe, Spain's real estate market is poised to maintain its competitive edge over many EU countries in 2023. The Bank of Spain predicts a 10% return for the Spanish real estate market in 2023.
Conclusion
If you are looking to invest in the Spanish property market in 2023, you can expect a successful year despite the economic challenges. Opportunities abound, and it may be an ideal time to take advantage of these trends, secure a bargain, and secure your investment for the future. For an easy buying experience with full support throughout the process, it is recommended to get in touch with the experienced team at Micasamo. They offer a first-class end-to-end service, including free consultations with legal, financial, and residency advisors, to ensure your investment journey is smooth and secure.