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Spanish housing market is cooling down: A 2023-24' outlook

Villa contemporary design in Costa del Sol
Villa contemporary design in Costa del Sol

The Spanish housing market has attracted intense attention from local and foreign investors in recent years. After experiencing a recovery following the devastating 2008 financial crisis, the market now shows concerning indications of slowing down. Multiple authoritative reports are predicting decreases in housing prices over 2023 and 2024.

Spanish housing prices in touristic vs non-touristic municipalities
Spanish housing prices in touristic vs non-touristic municipalities

The market underwent massive growth in the early 2000s, with housing prices rising to unprecedented and likely unsustainable levels, only to steeply crash during the housing crisis of 2008. A recovery finally began slowly picking up steam in 2014, but despite this renewed vigor, worrying signs of deceleration have recently emerged. Leading forecasts indicate likely declining prices in the coming years.

Spanish housing market is cooling down

The chart shows a downtrend starting to emerge in the data where figures seem to be headed back to levels of 2022
Spanish house prices, in % YoY

An in-depth report from CaixaBank Research predicts this impending slowdown owes to an array of factors. These include the ending of the expansionary phase of the credit cycle that had previously buoyed growth, diminishing pent-up demand after a frenzy of home buying during the recovery, and decreasing appetite for housing due to major demographic shifts. Similarly, ING’s economic analysis foresees a slowdown on the horizon but optimistically believes a severe 2008-style correction can be avoided this time around.

Interest rates partially to blame

This deceleration is expected to be most pronounced and disruptive in formerly highly desirable urban areas. Demand for urban housing is dropping while interest is rising for suburban and rural properties perceived as safer pandemic investments. This seismic shift in preferences is likely to directly lead to falling prices in once vibrant Spanish cities. The respected Spain Property Outlook 2024 report authored by industry experts anticipates gradual but steady declines in urban markets rather than a sudden crash.

Evolution of interest rates on mortgage loans and Euribor 12M
Evolution of interest rates on mortgage loans and Euribor 12M

Inflation contributes to price erosion

The predictions of notable price decreases are reinforced by hard data from Trading Economics showing a small but meaningful dip already materializing in Spain’s housing index in 2023. Relatedly, and equally concerning, BBVA Research points to stubborn inflation and central banks aggressively accelerating rate hikes as factors that could severely damage the housing market’s stability and contribute to additional price erosion going forward.

Spain remains an attractive investment market

Despite these alarming headwinds, Spain remains attractive on the global stage, retaining appeal for international investors and second-home buyers, especially in traditionally high-demand tourist hotspots like Marbella. However, numerous reports indicate sellers across the country may need to significantly adjust expectations around timelines for sales and moderate previous price goals in response to the shifting dynamics.

Spain home sales by type of buyer change %
Spain home sales by type of buyer

Looking ahead, while a notable market slowdown is widely expected from 2023-2024 with attendant decreasing prices, this is largely attributed to the pandemic’s lingering effects, rampant inflation, and rising interest rates. But most expert analyses continue to predict a soft landing overall, with gradual declines rather than a catastrophic crash reminiscent of 2008. This could even open rare opportunities for buyers able to capitalize on lower prices, particularly in urban zones where steeper drops seem imminent. However, sellers will require large doses of patience and realistic adjustments.

Evolution of Spanish house prices, including ING forecast
Spanish house prices outlook

In conclusion, while the market is broadly expected to slow through 2024 with moderating prices, the preponderance of evidence from respected experts suggests a gentle landing is likely, with gradual price declines rather than a disastrous repeat of 2008. This shifting landscape could set the stage for opportunistic buyers looking to enter the market, but will require proactive sellers to adapt expectations around timeframes for sales and offer prices.

Myriad complex factors, from the pandemic’s aftershocks to inflation, climbing mortgage rates, and demographic changes, appear to be driving these trends. While some regions may fare better than others, close monitoring of projections and proactive response planning seems prudent for all players in Spanish real estate.


At iBerotech, we leverage over a decade of experience in collaborating with financial services organizations. With a hands-on approach and strategic foresight, we've successfully navigated the complexities of the Spanish market, cementing our presence in the Spanish fintech ecosystem.



  1. CaixaBank Research, 2023.

  2. ING Think, 2023.

  3. Idealista, 2022.

  4. Bloomberg, 2023.

  5. Mordor Intelligence, 2023.

  6. Spanish Property Insight, 2023.

  7. Realista, 2023.

  8. Global Property Guide, 2023.

  9. JLL, 2023.

  10. Spain Property Outlook 2024, 2023.

  11. Trading Economics, 2023.

  12. BBVA Research, 2023.

  13. BBVA Research, 2023.

  14. MSN, 2023.

  15. Spanish News Today, 2023.


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