Spanish Property Market
Property prices go up and down as a consequence of economic growth as well as mortgage conditions. The more risk averse the banks, the higher the interest rates and/or the lower the Loan-To-Value.
In 2020, the COVID-19 pandemic occurred. This could cause prices to enter into a new cycle. However it is too early to analyse it properly. Let’s focus on the two past decades, to understand how prices may evolve in the future.
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Two decades of evolution: 2000 – 2020
Property prices grew from 2000 (€800/m2) to 2007 (€2,000/m2), decreased from 2008 until 2015 (€1,200/m2), grew from 2015 until 2020 (€1,400/m2), when coronavirus pandemic, and Great Lockdown, happened. This crisis is expected to have effects as negative as two precious great crises: the Great Recession (2008) and the Great Depression (1929).
In the 2015-2020 period, prices grew in a very healthy way (not too fast) thanks to a risk-averse Spanish banking system.
So, what can we expect for the future? Studying the past tells us that the 2008 crisis should be somehow protective for house prices this time. Indeed, it may seem unlikely that such a large house price crash may happen twice in a row. Somehow, the Great Recession has acted as a shield to protect Spanish real estate from the Great Lockdown.
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Graph – Spanish house prices between 2000 and 2020
Click here to access the graphical evolution of Spanish real estate prices between 2000 and 2020. You will see these 3 phases very clearly.
Between the 8 years that separated 2007 and 2015, prices decreased by 41%, as a very severe consequence of the Great Recession.
Following this huge crash, property prices started recovering, from a low point of €1,200 per square meter. Indeed at this time, house prices were back to their level of 2003!
Then from 2015 to 2020, a nice and gentle increase happened. Unlike in other countries such as Portugal, Spanish property prices went up at a moderate pace. Growth was slower than it was from 2002 to 2006. While house prices grew by 15% per year in the 2002-2006 period, they grew by only 4% per year from 2015-2020.
Although the Spanish press loves to speak about a housing bubble, this scenario is not very likely. There was no housing bubble ready to burst in Spain, which is why the COVID-19 crisis will likely not cause such a big decrease than the 2008 Great Recession caused (-41%).
In 2020, house prices are close to €1,400 per square meter nationally. While this is an increase compared to 2015 (+12%), it is still 34% lower compared to 2007. Therefore, Spanish real estate prices are only back to their level of 2004.
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Spanish Real Estate Market
You’re probably looking to buy or sell a property in Spain. As I bought a property in Spain myself in 2018, I gathered links to useful resources below.
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Property Prices in Barcelona, Madrid, Valencia, and more…
Property prices in Spain vary across regions and cities. Find below links to read about house prices in some of the most popular cities or regions.
Analysis of the Spanish property market
Rental prices in Spain
How to buy in Spain as a foreigner
Don’t hesitate to contact me.
