Rise in Real Estate Prices in Spain in 2022

We Warned You

Let's start with some figures. Idealista, the largest real estate portal in Spain, Portugal, and Italy, publishes reports on the dynamics of real estate prices, based on data about property offerings across regions, cities, and even districts of major cities. The growth in real estate prices in Spain in August 2022 was 4% (compared to August 2021).

Rise in Real Estate Prices in Spain in 2022Touristic coastal regions showed the most significant increase in real estate prices in Spain. For instance, in the Canary Islands, the cost per square meter of housing increased by 5% over the year, and in Malaga (Andalusia), it rose by 12%, surpassing the historical maximum real estate prices in these regions. In the Valencia region, prices increased by +8% over the year. However, there's still room to grow, as the maximum property price in 2007 was 12.7% higher than in August 2022. In Catalonia, the increase was +1.2% annually and -8.8% from the 2007 peak.

Interestingly, the Murcia province, neighboring the Costa Blanca coast, is still -38% below the peak prices of 2007, possibly due to its lack of sea access, despite being a wealthy region with a developed agro-industrial sector.

If we consider the Valencia district, the highest rise in prices is also observed in the coastal properties of Costa Blanca, while Valencia city is still -13.3% below the peaks but has seen a +12% annual increase.

In cities, the trend is similar: the closer to the sea, the higher the growth in real estate prices in Spain. The annual increase in price per square meter was +7% in Torrevieja, +10% in La Mata, +12% in Altea and Orihuela, +14% in Guardamar del Segura, +15% in Calpe, +16% in Finestrat, and +18% in Benijofar.

Barely recovering from the COVID-19 shocks, the Spanish real estate market, like the rest of the world, was influenced by geopolitical factors. Real estate prices in wealthy European countries have risen significantly, but many countries are yet to react to these changes. In Spain, everything is slow)) For 40,000 euros, you can't even find a garage in Germany, but in Spain, you can still buy a one-bedroom apartment.

Rise in Real Estate Prices in Spain in 2022

Does this mean that prices in Spain will catch up with those in Germany, or, conversely, is the German market overheated, and will their prices drop? It depends on the financial stability of Europe's economy as a whole and each country in particular. Undoubtedly, inflation affects the real estate market in Spain, but the annual inflation is still lower than the growth in real estate, making investing in Spanish real estate still profitable.

The energy crisis has led to a rise in electricity prices, prompting residents of northern European countries, after calculating the cost of the heating season 2022-2023, to decide to move south. The usual complaints of immigrants in Spain about freezing in winter without central heating seem utterly out of place this winter. Heating an apartment when it's above 0 degrees outside and when it's minus 20 makes a huge difference, both in feeling and cost. Alternative energy sources, like solar, are also more effective when you have 320 sunny days a year, compared to rainy areas.

Many Europeans preferred to acquire a backup plan and buy property by the sea in Spain.

Rental prices also rose in various regions by up to +20%, but due to economic difficulties, the risks of encountering non-payers increased.

Rise in Real Estate Prices in Spain in 2022Making forecasts nowadays is a thankless job. You can predict any absurdity, and it will happen, or you can calculate everything with all sorts of adjustments and still get it wrong.
The beginning of the 21st century has been tumultuous, and it seems that everything that could and couldn't happen has already happened.
It can be confidently stated that living by a warm sea is indeed more pleasant than by a cold one. It's better to miss the snow on the beach than to freeze in snowdrifts. It's tastier to eat fresh seafood, vegetables, and fruits all year round than frozen foods and canned goods from supermarkets. It's excellent if you're surrounded by friendly people who respect their own and others' rights, but that depends on each of us.

By the way, if you have decided to sell property in Spain – now is the time. Despite many difficulties with arrival, banks, payments, and other issues, real estate is being sold to Russians, and funds are being transferred. Many receive information from social networks, which is not always true and always overly emotional. Our clients know that managers at Granfield Estate always have the most up-to-date and accurate information on all matters of real estate and residence permits in Spain.