January 24, 2023

Housing prices continue to rise in Spain

Despite increased mortgage interest rates, housing prices continue to rise both in Spain in general and in the province of Málaga specifically.

Málaga ended 2022 with one of the biggest price increases for second-hand homes in all of Spain. The increase in the province ended up at 12.4 percent compared to a year ago. This is according to an article in the newspaper La Opinión de Málaga which refers to the housing portal Fotocasa's report "La vivienda de segunda mano en 2022" which was published on January 17.

The average square meter price in the province now amounts to 2,774 euros, which means that the province is back at levels that can be compared to those that applied during the property boom of 2006-2007. The increase in general in Spain is 7.5 percent with a square meter price of 2,051 euros on average.

In Andalusia, the prices of existing homes have risen by 7.3 percent on an annual basis, which is the second largest increase in the 17 years that Fotocasa conducted its analysis. Málaga is the most expensive province in Andalusia and also the one with the biggest price increase during the last year.

Fotocasa's theory is that even if the rising interest rates have certainly put an end to some housing deals, the situation has simultaneously created a feeling of "now or never" and an increased demand with buyers rushing to try to negotiate a good deal with the bank before interest rates rise even more. The demand for housing was very high during the third quarter of the year, which also led to prices continuing to rise steadily. According to Fotocasa's analysts, there is still a latent and solvent demand for second-hand homes that will characterize the first months of 2023.

Navarre was the province where house prices rose the most in 2022 (16.9 percent), followed by Alicante (14.8 percent), Santa Cruz de Tenerife (14.1 percent), the Balearic Islands (13.8 percent), Málaga (12, 4 percent), Guadalajara (11.4 percent), Granada (10.6 percent) and Cádiz (10.4 percent). The provinces with the highest square meter prices are Madrid (3,382 €/m2), the Balearic Islands (3,290 €/m2), Gipuzkoa (3,190 €/m2), Barcelona (2,973 €/m2) and Vizkaya (2,869 €/m2).

The eight Andalusian provincial capitals have all experienced rising house prices with Málaga at the top (16.5 percent), followed by Almería (11.7 percent), Granada (8.1 percent), Cádiz (8.0 percent), Seville (5 percent ), Córdoba (4.5 percent), Huelva (3.5 percent) and Jaén (2.8 percent).

As for other Andalusian municipalities, prices have risen in 83 percent of them. Most in Chiclana de la Frontera (26.3 percent) followed by Pulpí (20.1 percent), San Roque (19.9 percent), Torremolinos (19.9 percent), Fuengirola (19.6 percent), Las Gabias (19.4 percent) y Barbate (18.8 percent). In terms of square meter price, Tarifa is the most expensive Andalusian municipality (3,968 €/m2) followed by Fuengirola (3,454 €/m2), Marbella (3,425 €/m2), Benahavís (3,380 €/m2), Estepona (3,121 €/m2), Benalmádena de (2,991 €/m2), Málaga city (2,855 €/m2), Torremolinos (2,832 €/m2), Cádiz city (2,773 €/m2) and Nerja (2,601 €/m2).