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The Spanish real estate market is entering a phase of forced maturity. Sales are slowing, not because there is a lack of buyers, but because of limited supply. The paradox is obvious: The economy is growing, employment remains strong and credit is flowing, but buying a home is becoming increasingly difficult.

The real estate sector regained dynamism in 2024. Sales grew in much of the country, driven by a more favorable economic environment. However, the new supply remained insufficient to meet demand. The performance of the sector will be conditioned by several factors.

The housing sector is in a deceleration phase: low sales, high cancellations, and increased finished inventories. Certainty about VIS subsidies, reduced interest rates, and improved household financial balances will aid recovery, expected to be slow, gradual, and solidified by 2025.

At the end of 2022, the outlook for the residential sector was bleak. It was assumed that house sales and house prices would contract in 2023. Sales fell, but prices rose.. By 2024, the sector is expected to go from strength to strength and to consolidate a change in trend as 2025 approaches.

Going forward, the real estate market will be exposed to factors that will put negative pressure on demand. For example, interest rates are expected to continue rising and the 12-month Euribor is expected to stabilize above 4% and remain there for much of 2023 and 2024.

The COVID pandemic coincided with a surge in housing prices in several countries, especially some of the richest, despite the fact that at the same time there was an exceptional slump in economic activity that would normally have led to a sharp decline in prices.

In the coming months, the real estate sector will be conditioned by the downward revision of economic growth, the war in Ukraine, the shortage and high inflation of construction materials, the foreseeable rise in interest rates and the persistence of regulatory uncertainty.