January 30, 2025

2024 Real Estate Market: A Strong Year of Resilience and Growth

With almost the entire picture of sales statistics for 2024 ready, we can see that the Spanish real estate market has proven its resilience, surpassing expectations despite the challenges posed by high interest rates earlier in the year. According to recent data from the National Institute of Statistics (INE), November saw 54,299 property transactions, bringing the total for the year to 591,582 sales by the end of the month. With projections pointing to nearly 645,000 sales by year’s end, 2024 is already outpacing 2023’s figures and positioning itself as one of the best years for home sales since 2007.

A Strong Finish: November's Numbers Show Promise

While the number of transactions in November showed a monthly decline of 21.8%, the year-on-year growth was a notable 15%. This marks a significant rebound in home sales, which many attribute to a shift in the mortgage cycle following the easing of interest rates. The changing economic landscape, with improved mortgage conditions and falling Euribor rates, has given buyers renewed confidence, driving an uptick in home purchases as we approach 2025.

Maria Matos, Director of Studies at Fotocasa, highlights that “the de-escalation of interest rates has sparked a new wave of dynamism in the housing market.” With more attractive financing options, combined with a rise in household savings and a generally optimistic outlook, many buyers who had previously hesitated are returning to the market. This momentum is expected to carry forward into 2025.

New Homes Lead the Charge

One of the most striking trends in 2024 has been the strong performance of new home sales, which saw a year-on-year increase of 37.4%. In November alone, 12,328 new homes were sold, representing 22% of all transactions. This surge in new home purchases reflects growing demand for modern, energy-efficient properties and could continue to rise as buyers look for fresh opportunities in the market.

What to Expect in the Coming Months

As the year wraps up, experts predict that December will see sales surpass 55,000 transactions, rounding off a year that could be the second-best for home sales since the 650,000 transactions recorded in 2022. The improving mortgage landscape, coupled with government-backed initiatives like ICO guarantees, is expected to keep the market buoyant, making 2024 a standout year in recent history.

However, the future may not be as straightforward. While better mortgage conditions are anticipated to continue in 2025, they may not be enough to counterbalance the rapid rise in home prices driven by increased demand. With more buyers re-entering the market and the European Central Bank adopting a more flexible monetary policy, the demand for homes could further strain the supply, leading to continued upward pressure on property prices.

A New Era for Home Sales

The real estate market is entering a new cycle, fueled by falling interest rates and a resilient labor market. Fotocasa estimate that nearly 30% of potential buyers who had paused their searches due to high rates will soon return to the market. As financial institutions adjust to the new reality, we can expect even more buyers to begin their home searches in 2025.

This increased demand will likely lead to more competition for available properties, further pushing up home prices. With the current pace of sales, it’s clear that 2024 has set the stage for a vibrant, dynamic housing market moving into the new year. Whether you’re considering purchasing your first home or selling a property, now is an exciting time to be involved in the market. 

Source: fotocasa.es