Real Estate

Spanish property market review: A mixed 2022, and a down, but not out, 2023

Spanish property experts Sean Woolley from Cloud Nine Spain and Mark Stücklin from Spanish Property Insight have been sharing their thoughts about the market in 2022 and making predictions for 2023 in their podcast La Piedra. Comparing their experience on the ground with the data, they agree that 2022 was a year of two halves, with a very strong first half and a slight decline in the latter stages of the year.

Neither expert is predicting a crash for 2023, but rather a slowdown as the post-COVID pent up demand is fulfilled and interest rates and a few external tailwinds put off cautious buyers, but leave more experienced and motivated buyers continuing to purchase.

Mark Stücklin has been crunching the numbers and revealed that the October figures for the Spanish property market showed a slight decrease in overall demand compared to October 2021, the first decline in overall demand since 19 January 2021. But he was quick to say that it was only 4-percent down and that he didn’t feel it was a bad sign, simply the post-COVID boom running out of steam.

The details:

Foreign demand was incredibly high, especially in the first half of the year, more than double what it was even in the boom year of 2007 and up 53 percent compared to 2021.

International buyers represent 20 percent of the market and it’s clear that the foreign appetite for properties in Spain is very high.

Buyers from Poland, Bulgaria and Ukraine are on the up, as are buyers from countries around Russia, looking for a safe place to be, far from the conflict.

British buyers haven’t been put off by Brexit and are still growing, increasing by 68 percent in the first half of 2022. They still represen the biggest group of buyers by nationality and with a seemingly undiminished appetite for property in Spain.

Sean Woolley agrees that these figures were reflected in practice on the Costa del Sol, with a very busy period January to August, followed by a noticeable drop off in demand. However, like Mark, he doesn’t feel this is anything to be alarmed by, simply a tapering off of the post-COVID demand and a return to more normal levels.

In the Marbella area,Sean has seen a huge increase in buyers from North America, and more interest from the Middle East and Far East, attracted by the global brand of the Costa del Sol. Despite rising interest rates, a cost-of-living crisis, an energy crisis and a war in Europe, people have continued to be attracted by the quality of life, safety, weather and lifestyle in Spain.

Liberated by working from home to pursue their dream of living or owning Spanish property, they’re driving the strong figures.

Predictions for 2023

While neither expert has access to a crystal ball, they both agreed they felt cautiously optimistic and definitely did not feel there was going to be a crash in 2023. “I am between cautious and optimistic for 2023,” Sean said. “I think we’re going to see the people who really do want to make a move, or make an investment here, continuing to do that.”

He added that he thinks the Spanish market is going to see a little drop off in prices that needed to be corrected in certain areas. “But I don’t think people should expect a fire sale, because we don’t have any of those underlying conditions in place as we did at the start of the financial crisis.”

Some clients are already starting to try and make comparisons, and are waiting for a 40-percent drop in
prices, but there’s no evidence showing him that’s going to happen. There isn’t a problem with the supply of money, banks are still lending, there’s high employment and demand.

“It does frustrate me when people compare it to 2008. Because the conditions are just not alike in any way,” Sean said. And we have a different driving force behind most people’s decision making – they want a better quality of life for themselves and their families in a post-COVID world.”

Mark adds: “There won’t be the growth that we saw this year. You could interpret it at as Spain’s heading downwards, but that’s not the case – it’s just settling down.”

The interest rates increase saw sales brought forward, which is going to depress demand in the first half of this year, to a noticeable degree, mainly for the local market, he said. But he don’t see any reason out there to be worried about a crash or a bubble “because there’s no building bubble. In fact, Spain’s housing stocks are declining and are at near historic lows.”

Spain is not building anywhere near as much housing as it should, given the size of the population, the age of the stock, and other factors, Mark noted. Government policy will discourage investment in housing, house building, and the quality and quantity of the rental market. This favours property owners and puts upward pressure on prices.

“So, I don’t see reasons for a bursting bubble scenario or a crash scenario,” Mark says. ” definitely see some headwinds, but there’s still some good tailwinds. So overall, I expect 2023 will be a post boom settling down.”

Mark and Sean will be back with more Spanish property market information and insight. You can find the La Piedra podcast on the Cloud Nine Spain YouTube channel on Apple Podcasts and SoundCloud.

Meet the experts:

Sean Woolley is the founder and director of Cloud Nine Spain, which operates on the Costa del Sol, Costa Blanca and the Costa Calida. With 20 years of experience of helping clients buy and sell properties in Spain, he has contributed to a host of publications, offering no-nonsense practical advice, Sean is also the author of an insiders’ guide to buying Spanish property called “From the Ground Up.”

Mark Stücklin is a property specialist, market analyst and commentator – one of the authorities in the industry often quoted by the British media when they cover the Spanish property market. Mark has been based in Barcelona since 1999, wrote a column on Spanish property for the Sunday Times for three years and is the author of the book “Need to Know: Buying Property in Spain.”

Since 2003, he has been publishing the latest Spanish property market news, analysis, and guides at his website Spanish Property Insight drawing on his two decades of experience in the sector.

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Sean Woolley is the founder and director of Cloud Nine Spain. With 20 years’ experience of helping clients buy and sell properties in Spain, he’s known as “The Property Doctor” and has contributed to a host of publications. He has recently written the book “From the Ground Up – The Insider’s Guide to Buying Spanish Property,” sharing his years of experience, real life stories, tips and tricks with buyers interested in investing in Spanish Real Estate.

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