Record inflation, rising interest rates, rising prices for raw materials and energy, problems in the labor market and a drop in the income of the population — all this undoubtedly left its mark on the development of the Spanish real estate market in 2022 and its prospects in 2023.
However, all these factors, and more, did not lead to the collapse of the market. Large demand remains, although it is replenished mainly by foreign buyers, and market participants report good sales, albeit smaller than in 2021.
But what can these market participants tell us about the prospects of the market this year? Below we will present the opinions of four real estate experts in Spain and their forecasts for 2023.
Vicente de Juan, Head of Expansion at Grupo Valgine
Of all the factors influencing the market, Vicente de Juan, Director of Business Expansion at Grupo Valgime, identifies two-rising interest rates and high economic uncertainty caused by the armed conflict in Ukraine and the resulting crisis trends for the global economy. De Juan supports forecasts of a slowdown in price growth coming in 2023.
Lola Garcia Escolar, CEO at Olivares Consultores
The prospects of the real estate sector, according to Lola Garcia Escolar, are largely related to the dynamics of the entire Spanish economy. In this regard, she notes some positive assessments of the country's future. Thus, the Bank of Spain has already ruled out a recession in early 2023 and possibly before the end of the year. Nevertheless, GDP growth will be only 1.2%, and the inflation rate will reach 4%.
However, if we consider Spain as part of the eurozone, the picture will be a little darker. For example, negative dynamics in the consumer price index (CPI) is expected, and the European Central Bank (ECB) will continue to raise interest rates on lending throughout the year.
Nora Garcia Donet, President of the Asicval Association of Companies
Nora Garcia Donet adheres to a positive assessment of the current year. She does not expect big changes, at least until another unforeseen shock occurs on the international scene, comparable to the conflict in Ukraine in 2022. According to her, the market is returning to a plausible norm and balanced growth rates of sales and prices.
In her opinion, if we consider the prices of residential real estate in relation to 2022, then of course some decrease will be recorded, but it will not be sharp or large. The market correction, one way or another, had to happen. Especially when housing prices have already exceeded the limits, when an ordinary buyer will be ready to part with his money.
On the other hand, she emphasizes that there are problems, for example, in the segment of new construction. Its supply is extremely limited, and the pace of construction is very low. There is a shortage in the market and this will negatively affect the dynamics of the Spanish market.
Ricardo Maldonado, Regional Head of Gestalt
Ricardo Maldonado, Gestalt's regional director for the Levant and Balearic Islands, notes that they expect a slowdown in price growth, given their record growth in 2022. The same situation is observed throughout Spain, with the possible exception of Valencia. The latter is a hotbed of active housing construction and great demand, on which one can rely and achieve stability in the face of the coming recession in the global economy.