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Real Estate prices are estimated to drop as much as 7% (2023)

Investment opportunities arise in the Spanish real estate market

Terrace apartment in Barcelona
Views from a terraced apartment in Barcelona

According to CAIXABANK, real estate prices in Spain are expected to fall by as much as 7.1% in real terms in 2023, after accounting for inflation. However, other analyses present a more nuanced picture. For instance, Bankinter's analysis predicts that residential house prices in Spain will fall by 3% in 2023 and by another 2% the following year, influenced by factors such as sticky inflation and central banks' rate hikes. The war in Ukraine is also considered a destabilising factor that will have "enormous" consequences on the market for years to come source.

If economic conditions deteriorate further in the coming years, it's possible that we could see price-drops similar to those experienced during the 2013-14 recession, when prices fell by around 40% in some areas.

It's worth noting that location is an important factor when it comes to investing in real estate. Premium locations may be more resistant to price declines during times of economic downturn. In fact, areas such as the Mediterranean coast and the islands are already showing the greatest upward pressure on prices, with a tendency to increase source.

Some notes regarding real estate prices in Spain:

  • The predicted decline in housing prices in Spain is likely due to a variety of factors, including economic uncertainty and the potential for a slowdown in the market.

  • These macro-economic conditions might be affected among other things by the current Russia-Ukraine war, which might come to an end hopefully soon.

  • While the overall housing market may see a decline in prices, it's important to keep in mind that location can have a significant impact on the value of a property even in times of harsh downturns.

  • If you're looking to invest in interesting neighbourhoods in Spain, it may be worth keeping an eye out for deals that may arise due to these market conditions. This could be a good opportunity to get a property at a discounted price, especially if you're willing to put in some work to fix it up or renovate.

  • It's also worth noting that while the housing market may be facing some challenges, Spain is still a popular destination for tourists and property buyers, which means that there may still be opportunities for investors to turn a profit. It's important to do your research and carefully consider the potential risks and rewards before making any investment decisions.

  • Another thing to consider is the growing interest in rural areas, where many have chosen to relocate recently, which is affecting the sale prices in areas that historically had less attractiveness.

  • If you're interested in investing in interesting neighbourhoods in Spain, there may be opportunities for great deals to emerge as market conditions change. Keep an eye out for these opportunities, but be sure to do your research and consider the potential risks and rewards before making any investment decisions.

Tip: Based on my own experience, I'd recommend checking, and looking for properties in small towns located at about one hour distance from the main Capitals of Province. Whether for rent or buying, you'd be surprised by the price differences compared with those located in the center of popular cities. Additionally, the national average in Spain in year-on-year terms is 4.8 percent, with the Mediterranean coast at 4.7 percent, indicating potential investment opportunities source..


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