Spanish Housing Market Report Q2-2024: Costa Blanca Prices are 9,2% higher | Sales 8,2% down
20 Sep 2024
Essential Insights from the Report:
In the second quarter of 2024 the number of homes sold in Spain was 3,4% lower than in the first three months of the year and compared to the same period in 2023 the national market shrank with 10%.
Property prices in Spain rose on an annual basis with 2,6% and more houses were paid for in cash.
On Costa Blanca property prices rose on average 9,2% in the last 12 months.
The sale of new build properties in the last year jumped in Alicante with 13,4% while 11,5% less existing homes were sold.
Costa Cálida noted a massive price jump of 20,1% for new build homes compared to the first quarter of 2024. On an annual basis prices of new build homes rose with 7,6% in the region.
Quick Market Overview:
Spain-wide Home Sales: Decrease of 3.4%
Costa Blanca Property Transactions: Decrease of 8,6%
Mortgages: 63,8% of homes financed
Price Trends: Nationwide increase of 2,9% in the second quarter (annually 2,6%)
Price Trends: Costa Blanca price rise 4,1% in the second quarter (annually 9,2%)
International Buyers: Account for 14,84% of purchases in Spain, with a notable 43,52% in Costa Blanca
Top 5 international buyers in Spain: British, Germans, Moroccans, Romanians, French (see all 18 nationalities below)
Read the full report below
Background:
On September the 2nd 2024, the Spanish Property Registry (Colegio de Registradores de la Propiedad, Bienes Muebles y Mercantiles de España) released the Q2 2024 property market insights. At nardia real estate agency in Altea, our commitment is to empower you with fact-based insights, enabling informed decisions. Discover our comprehensive market analysis below.
In This Market Report:
Homes Sold in the Second Quarter of 2024
Top 10 Provinces with Most Homes Sold in Q2-2024
Price Fluctuations and Trends
Trend break: prices gradually on the rise
Market Overview Second Quarter 2024:
Comunidad Valenciana & Costa Cálida
Market Sentiments
Trend: Buy-to-Rent
Your Investment Partner in Costa Blanca
Foreign Demand
Q2-2024 Foreign Demand by Region
Nationalities that bought the most homes in Q2-2024:
Mortgages
Trend: Mortgages more attractive?
The Spanish Economy
Inflation:
Employment Q2:
Company Formations Q2:
Insolvency proceedings Q2
Market Outlook
A 10-year Outlook on the Spanish Property Market: 2024-2034
1. Homes Sold in the Second Quarter of 2024
In Q2 2024, the overall property market in Spain shrank with 3,4% with 146.273 homes sold. This while in the first quarter of the year a total of 151.476 homes were sold with a rise of 16,6% compared to the last quarter of 2023.
On an annual basis the second quarter shows a decrease of 10% when compared to the second quarter of 2023.
The Comunidad Valenciana is with 23.340 homes sold (25.094 in Q1-2024 and 20.958 in Q4-2023) the second region of Spain with a market share of 16,39% of the total Spanish property market which is slightly below the market share in the previous 3 quarters (Q1-2024 16,53% and both Q4-2024 and Q3-2024 16,41%).
On Costa Blanca we notice that similar to the previous quarter the number of new build properties sold has increased on an annual basis, this time with 13,4% to 7.649 new homes (Q1 showed an annual increase of 13,8%).
While the sale of existing homes dropped with 11,5% to 39.500 (Q1 showed a decrease of 8,4%).
We believe that the lower number of resale homes sold is a sign of the shortage in supply of quality homes in the current market on Costa Blanca. We notice that some home owners postpone their decision to sell and move to another property as they encounter difficulties to find a property that matches their wish list and budget.
Nevertheless, Alicante and Valencia are again among the 7 provinces in Spain with the most homes sold with 11.700 (Q1-2024 12.807, Q4-2023 10.652 and Q3-2023 11.990) and 8.870 (Q1-2024 9.300, Q4-2023 7.950 and Q3-2023 8.770) homes sold respectively.
2. Top 10 Provinces with Most Homes Sold in Q2-2024
Below you find the top 10 provinces with the number of homes sold in the second quarter of 2024 including the variation compared to the previous quarter.
Madrid 17.388 -/- 5,8%
Barcelona 14.329 -/- 9%
Alicante 11.700 -/- 8,6%
Valencia 8.870 -/- 4,6%
Malaga 8.869 + 10%
Sevilla 5.364 +9%
Murcia 5.177 -/- 12,3%
3. Price Fluctuations and Trends
Property prices in the whole of Spain increased with 2,9% compared to the first quarter of the year. When compared with the second quarter of 2023, year-on-year the average property prices in the whole of Spain rose by 2,6% (previous quarter showed an annual increase of 1,9%).
On average in Spain the property prices of new build homes rose in a year with 2,4% and for existing homes with 2,5%.
In Alicante from March to May this year the average home price rose with 4,1%, being a rise of 4,4% for new build homes and 3,5% for resale.
On an annual basis the rise is even more significant with an average of 9,2% compared to the second quarter of 2023. Over the last 12 months’ prices of brand new properties rose with 12,4% (12,5% in Q1) and resale home prices were 6,9% higher (3,9% in Q1).
In Valencia average house prices rose with 4,5% a sharp rise compared to the mild 1,5% price rise in the previous quarter. New homes in Valencia cost 12% more than in the first quarter (Q1-2024 8%, Q4-2023 -7,4% and Q3-2023 -10,7%) and resale properties sold for 3% higher prices (Q1-2024 0,3%, Q4-2023 4,6% and Q3-2023 0,4%).
On an annual basis prices in Valencia rose on average with 3,9% (previous quarter 3,7%). Prices for new build homes in Valencia showed for the fourth quarter in a row a decrease year-on-year with 7,9% (previous quarter decrease of 5,5%) while existing home prices rose with 6,2% (previous quarter showed an annual increase of 4,8%).
The last annual price rise for new build homes in Valencia was noted in the second quarter of 2023 with a price rise of 2,8% compared to the second quarter of 2022.
Murcia noted a rise of 5,2% on average with a massive jump of 20,1% for new build homes. Compared with the decrease of 10,6% in the previous quarter the number is significant (Q4-2023 -0,1% / Q3-2023: +0,4%).
Resale properties in Murcia sold for 1,1% more than in the first three months of the year. This while in the previous quarter a decrease of 3,1% was noted (Q4-2023 +0,4% / Q3-2023 : +1,1% & Q2: +1,4%).
On an annual basis Murcia prices for new build homes increased with 7,6% (Q1 9,6%) while existing home prices were 0,8% lower (Q1 -/- 1,2%).
4. Trend break: prices gradually on the rise
From the fourth quarter of 2021 up to the third quarter of 2022, during four consecutive quarters sharp price rises for property were registred on both national level as on the Costa Blanca. These quarterly price rises, compared with the property prices a year before, started to slow down in the fourth quarter of 2022 and continued to slow down in the first half of 2023.
In our market report for the first quarter of 2024 we already noted that the trend of slower rising property prices seemed to turn around.
The trend break, with higher price rises than in the previous quarter, started by the end of 2023 in the third quarter.
The official numbers for Q2-2024 show that prices continue to rise at a faster pace again.
Below you find the graphics, prepared by nardia real estate, that show the % of price rises in each quarter since 2021. The chart includes the total average price rise (blue line), the average price rise of New Build Homes (orange line) and the average price rise of Resale Homes (grey line).
Average price rise per Quarter since Q1-2021 in Spain
Average price rise per Quarter since Q1-2021 on Costa Blanca
Above: Annual Percentage of Quarterly Price Rise .
© Images: nardia real estate agency. Data source: Registradores.
Of the 50 provinces in Spain 32 noted higher average prices for existing homes in the second quarter of 2024 compared to the previous quarter. Whereas for new build homes higher prices were recorded in 26 provinces.
Below some of the provinces with higher and lower property prices in the second quarter of 2024:
Higher Property Prices (compared to the previous quarter):
Las Palmas 19,6% (previous quarter -4.6%)
Segovia +15,7% (previous quarter -8,8%)
Badajoz 12,8% (previous quarter -0,4%)
Soria +16,4% (previous quarter 14,5%)
Ciudad Real +13,1% (previous quarter -7,1%)
Valencia +4,5% (previous quarter 1,5%)
Madrid +1.4% (previous quarter 1,9%)
Santa Cruz de Tenerife +0.6% (previous quarter 0,6%)
Illes Baleares +6,3% (previous quarter -4,9%)
Lower Property Prices (compared to the previous quarter):
Cáceres -14,4% (previous quarter +24,8%)
Ourense -9,4% (previous quarter +0,2%)
Córdoba -8,8% (previous quarter +32,7%)
Gipuzkoa -3.1% (previous quarter +4,1%)
Teruel -4,9% (previous quarter +7,1%)
5. Market Overview Second Quarter 2024:
The demand from our national and international clients continues to be strong this year. Our clients and investors appetite for quality villas and apartments in the most sought after areas is unchanged.
Both the feedback from our clients, the market and other professionals we speak with, like bankers, mortgage brokers, asset managers and lawyers, confirm that the demand for luxurious top quality property in Spain continues to be high.
National demand for property was 4,15% lower in the second quarter with 124.566 homes sold to Spaniards compared to 129.951 in the first three months of the year. Although the number is slightly lower than in the first three months it is still significantly more than in Q4 2023 when 110.237 homes were bought by a national buyer and approximately 5% more than the 118.519 national purchases in Q3-2023.
In our previous market reports we mentioned a rise in national demand is coming.
Now that the European Central Bank has lowered the interest rates for the second time in this year (the last interest rate cuts were in 2022) there will be more demand for property as more people will be able to obtain a mortgage while others will have more lending capacity due to the lower rates.
Costa Blanca is located in the Comunidad Valenciana region. With 23.340 homes sold (Q1 25.094) this is the second region of Spain with a market share of 16.39% of the total Spanish property market (Q1 16.53%).
In Alicante 11.700 (Q1 12.807) homes were sold in the first quarter, 8,6% less than in the previous quarter.
Below you find an overview of the most sought after regions, the number of homes sold in the second quarter of 2024, the market share in the Spanish property market and the variation compared to the previous quarter:
#1 Andalusia, 30.709 homes sold, 8,2% more than the previous quarter (Q1 28.390 / Q4-2023 26.289), market share 20%
#2 Comunidad Valenciana, 23.340 homes sold, 7% less than the previous quarter (Q1 25.094 / Q4-2023 20.958), market share 16.39%
#3 Cataluña, 22.061 homes sold, 9% less than the previous quarter (Q1 24.238 / Q4-2023 20.502) market share 15,57%
#4 Comunidad de Madrid, 17.388 homes sold, 5,8% less than the previous quarter (Q1 18.465 / Q4-2023 15.089), market share 11,87%
#7 Canary Islands, 6.222 homes sold. 1% more than the previous quarter, (Q1 6.163 / Q4-2023 5.081), market share 4,06%
#8 Murcia, 5.177 homes sold, 12,3% less than the previous quarter (Q1 5.902 / Q4-2023 4.886). Market share 3,77%
6. Comunidad Valenciana & Costa Cálida
In the Comunidad Valenciana region, where Alicante and Costa Blanca are part of, house sales decreased with 8.5% compared to the same period in 2023. A total of 93.042 homes were sold in the last 12 months. (Q2-2023: 101.702 and Q2-2022: 92.712). In that same 12-month period price levels in the region rose with 6,7% (Q2-2023 5,4%) on average compared to a year before and rose with 3,6% compared to the previous quarter.
Compared to the previous quarter 7% less homes were sold with 23.340 properties sold in the second quarter of 2024.
Alicante property prices rose by 3,5% for existing homes and 4,4% for new build homes when compared to the previous quarter.
11.700 homes were sold in Alicante in the second 3 months of the year. 8.6% less than in the previous quarter.
In Murcia, where Costa Cálida is, an overall price rise of 5,2% compared to the first quarter was noted. When split by property type we see that new build homes sold for much higher prices with a 20,1% increase while existing homes sold for 1,1% more.
On Costa Cálida the exact same number as the previous 12 months were sold with 21.397 homes sold from Q2-2023 to Q2-2024 (Q2-2023 22.239 / Q2-2022: 21.689). Being 3.9% less homes sold than in the previous 12 month period of the year before.
Compared to the first three months of the year in Murcia 12,3% less homes were sold with a total of 5.177 properties sold in the second quarter.
7. Market Sentiments
Our knowledge and expert insights into market trends position us as the go-to agency for serious clients who are looking for a problem-free property investment.
Costa Blanca continues to be a magnet for international property buyers in Spain, who make up with 43,52% nearly half of the market activity in this region. Our analysis provides insight into the preferences and trends among international and national clients, highlighting the top nationalities investing in Spanish homes further below.
8. Trend: Buy-to-Rent
On top of the plans to acquire a second home to enjoy the Mediterranean climate during holiday or as a retirement destination, we speak with more and more people who are seriously thinking of a property investment in Spain to rent. Either for short term holiday rentals (that require a rental license) or as a long term rental property (that does currently not require any licence), both options offer a fantastic potential return on investment.
If you want to know more about the possibilities to rent out a property in Spain, you can read the blog on our website about property rentals and the new rules that came into force for tourist rental properties on Costa Blanca in August this year.
Of course not everybody wants to own a property in Spain. Some may prefer to travel to different countries while others simply cannot afford a second home. Whatever the reason is to rent, we notice a steady demand for quality rental properties.
Our team is confident that it is an excellent investment to buy a property in Spain and rent it out as there is an enormous shortage of rental properties.
There is an even greater demand for quality properties on the most sought after locations.
Obvious but not to be overlooked: in the more sought after areas on the coast the pool of potential renters is large and full of people with a stable and comfortable pension or remote-worker income that can be ideal renters for your property.
In our previous market report, published on 2nd of June, we expressed our expectations of new legislation coming into place with stricter rules for holiday rentals. Early August new rules effectively came into force in the Comunidad Valenciana region (Costa Blanca).
9. Your Investment Partner in Costa Blanca
At nardia real estate agency, we’re more than just estate agents; we’re your partners in navigating the property market. Whether you’re seriously thinking of an investment opportunity or have decided to finally build that custom made villa you´ve dreamed of.
We are here to help. We know the market and understand the rules of the game!
How can we help you?
10. Foreign Demand
Of all 151.476 homes sold in Spain in the second quarter 14,84% was bought by a foreign investor (14,21% in the first quarter). A total of 21.706 properties were sold to a foreigner.
Second Quarter 2024 14,84% | 21.706
First Quarter 2024 14,21% | 21.524
Fourth Quarter 2023 15,12% | 19.637
Third Quarter 2023 15,44% | 21.640
The quarterly percentages are amongst the highest in history. The highest percentage was noted in the third quarter of 2023 with 15,44%.
While the total number of homes sold in Spain in the second quarter decreased with 3,4% (5.203 properties) compared to the first quarter, the percentage of foreign buyers as part of all sales in Spain rose as did the absolute number of homes acquired by foreigners.
On Costa Blanca 43,52% (previous quarter 43,03%) of all homes were sold to a foreigner and on Costa Cálida 23,58% (previous quarter 23,36%).
11. Q2-2024 Foreign Demand by Region
Comunidad Valenciana 28,78% foreign demand (28,79% Q1)
Alicante 43.52% foreign demand (43,03% Q1)
Murcia 23.58% foreign demand (23,36% Q1)
Canary Islands 31,11% foreign demand (26,01% Q1)
Balearic Islands 33,37% foreign demand (31,72% Q1)
Andalusia 13,73% foreign demand (13,83% Q1)
At nardia real estate agency we firmly believe that the strong demand for quality homes on the Costa Blanca is based on a combination of various important factors.
Our clients often mention the location in terms of the mild climate and excellent transportation with the rest of Europe, a very affordable living standard and also specialist medical facilities that are available on Costa Blanca. There are various private hospitals with very good international staff, including doctors and surgeons. All these services are available in your own language.
Based on our sales closed in the 9 months up to date and the conversations we have with clients we are confident demand will be stable on the Costa Blanca for the foreseeable future. Sales made in 2024 have already exceeded those in the whole of 2023 both in terms of properties sold as in revenues generated by our sales team.
We expect our clients to maintain their plans to become owners of a home in Spain and to further expand their investments in rental properties.
12. Nationalities that bought the most homes in Q2-2024:
British 8,37% | 1.798 homes
Germans 6.98% | 1.499 homes
Moroccans 6.10% | 1.310 homes
Romanians 5,31% | 1.141 homes
French 5,22% | 1.121 homes
Italians 5,18% | 1.112 homes
Dutch 5,14% | 1.104 homes
Belgian 4,65% | 999 homes
Polish 4,63% | * homes sold unavailable
Ukrainians 3,06% | *
Chinese 3,02% | *
Swedish 2,75% | *
Russians 2,39% | *
Irish 1,82% | *
United States 1,71% | *
Bulgaria 1,17% | *
Lithuania 1,08% | *
Czech Republic 1,06% | *
13. Mortgages
In Spain a total of 146.273 (Q1-2024 151.476) properties were sold in the second quarter and 93.301 were financed with a mortgage (Q1-2024: 108.910). In other words, 63,8% of all homes sold was financed (Q1-2024: 71,9%).
In the second quarter 15.609 mortgages less than in the first quarter were granted while the total number of homes sold decreased with only 5.203.
The absolute amount of mortgages granted was 14,33% lower than in the previous quarter (the first quarter showed a rise in mortgages of 21,1% compared to Q4-2023).
In Spain the average mortgage granted is 145.229,- euros (previous quarter: 143.498,- euros). Of all new mortgages granted 56.88% opted for a fixed interest rate.
The average fixed interest rate in the second quarter of 2024 was 3,49% (previous quarter 3,66%). Interesting fact: the lowest historic average interest rates were reached in 2022 with only 2,24%.
The average repayment term is 24,75 years (Q1-2024 24,08) with an average monthly instalment of 724,70 euros (Q1-2024 734,80 euros).
Mortgage and monthly income
On average mortgage payments require 32,4% of the monthly income (previous quarter 33,2%), with exceptional high efforts of 53,8% of the monthly income on the Balearic Islands (previous quarter 62,6%) and 39,2% in Madrid (previous quarter 40,3%).
14. Trend: Mortgages more attractive?
The percentage of property investors in Spain that pay the purchase price in full without the need of financing is still considerable. More than 36% of all properties sold are paid in cash. Contrary to the previous quarter in the second quarter of 2024 less mortgages were granted while the number of properties sold decreased at a different pace as mentioned here above.
In our previous market report we noted that a trend may be becoming visible of more homes being financed with a mortgage. Although in our vision more homes will be financed with a mortgage in the months to come, the trend has not continued in the second quarter of the year.
In percentages in the second quarter of 2024 14,33% less mortgages were signed while 3,4% less homes were sold.
In absolute terms this translates into 5.203 less homes sold and 15.609 less mortgages signed in the second quarter.
The decrease in mortgage signed was higher than the decrease in homes sold, meaning more properties were paid in cash than in the previous quarter.
In Comunidad Valenciana 11.045 homes were financed with a mortgage in the second quarter of 2024. That is 47.3% of all homes sold.
In Murcia 2.557 mortgages were granted for the purchase of a home. That is 49.4% of all homes sold.
Both Costa Blanca and Costa Calida again show that more homes are paid cash than the national average.
15. The Spanish Economy
Inflation:
The Spanish economy continues to perform well. The interest rate cuts announced by the European Central Bank in June and September make more financing available to both businesses and families.
In terms of tourism and visitors 2024 is heading to break all records. In June alone 9 million tourists visited Spain (12% more than a year before). Spain is the second most visited country in the world after France. According to an analysis by BBVA Research, published on September 23, 2024, the total tourism spending between May and August 2024 grew by 14,4% compared to the previous year where national tourists are spending 6,2% more and foreign tourists 23,7% more than a year before.
The inflation in Spain was in August with 2,3% just above the European average of 2,2%.
Employment Q2:
In the second 3 months of 2024 0,37% more jobs were created than in the last previous quarter according to the Spanish National Statistics Institute (INE). New job creation for 2024 is expected to be 3,5%. In 2023 the number of jobs increased with 3.8% (corresponding to 783.000 new jobs).
Company Formations Q2:
In the second three months of 2024 31.293 new companies were created (Q1 32.788). An increase of 5,8% compared to the second quarter of 2023.
In the last 12 months between July 2023 and June 2024 111.740 companies were created. 5,6% more than in the 12 months before.
Since the second quarter of 2021 the number of company creations has been above 100.000 per year.
In the second quarter of 2024 in the Comunidad Valenciana 3.918 new companies were created. That is 7,6% more than a year before. In Murcia 734 being 12,2% more than in the second quarter of 2023 and on the Balearic Islands 1.259 being 2% more. In Andalucia 5.426 new companies representing a small decrease of 0,5% compared to 2023.
The vast majority of new business are created as Limited Liability Companies.
Insolvency proceedings Q2
The number of limited liability companies in serious financial difficulties that filed for insolvency proceedings in Spain in the second quarter of 2024 was 1.180, a rise of 10% compared to the same quarter of 2023.
16. Market Outlook
Our vision in terms of sales and demand on the property market for the medium long term is unchanged. The remaining 3 months of 2024 we expect to unfold in line with our previous outlook published in June this year. For the year 2025 we foresee demand to continue on similar levels with an increase in the absolute number of homes sold to national buyers.
In the next release by the property registry, with the statistics for the third quarter of 2024, we expect some of the improved mortgage lending capacity to be reflected as it may have had some impact on home sales of August and September. This, combined with a shortage of quality homes will likely lead to a further rise in housing prices.
All of these market indicators confirm a solid sentiment with a strong indicator of the attractiveness and economic strength of Spain in general and more specifically Costa Blanca and Costa Cálida.
As a team we have a strong connection with the real estate market, we have been in the business since 2013 and speak with buyers and sellers literally every day of the week. Our aim is to stay one step ahead of the game and inform our clients based on facts and numbers.
We love to deliver! This we do through our extensive network where we deal directly with the best property developers, top quality construction companies, international investment funds, Spanish banks and real estate portfolio managers in Spain and abroad.
17. A 10-year Outlook on the Spanish Property Market: 2024-2034
First published and included in the Q1-2024 market report on june 2, 2024.
Based on the available economic data, market trends we spot and international attention for Spain we believe that the property market in Spain´s most sought after areas will grow significantly in terms of demand and price in the next 10 years. The supply is unlikely to get up to speed with demand and this is expected to keep price trends to be upwards on average year-on-year with possibly quarterly contractions.
In the next 10 years, i.e. by 2023, we expect property prices to double in the markets with high demand. Being these high-demand markets in Spain: Costa Blanca, Valencia City, City of Madrid and Andalusia.
On the Balearic Islands we expect a strong price increase, perhaps as much as 60%, but not as high as in the other areas. How the property market in Catalunya and the city of Barcelona will develop will largely depend on the political situation in the region in the years to come.
At nardia real estate agency we are confident for the long term future and look forward to help you as our client for many years to come!
The information used in this report is freely available on the website of the Spanish Property Registry, National Institute for Statistics (INE), the Spanish Company Registry, EuroStat, Reuters and BBVA Research.
This Housing Market Report for the Spanish Property Market for the Second Quarter of 2024 has been written by Tom Bruijnzeel. He is the author of this informative Market Report about the Spanish Real Estate Market including the Market Outlook and the 10-year-outlook on the Spanish Property Market 2024-2034 plus other articles and reports on our website.
Tom has a master degree in Law from the University of Rotterdam (the Netherlands), holds a bachelor degree in Business and Economics and is fluent in Spanish, French, English and Dutch with full business proficiency in German. In 2013 he started nardia real estate agency in Spain. The website www.nardia.es is available to all who are thinking of investing in a property in Spain or already own a property and have questions about property tax in Spain, the correct registration of a property in Spain or the taxes due when selling a house in Spain.
If you want to connect via Linkedin: linkedin.com/in/tombruijnzeel
