Spanish housing Prices Show No Sign of Correction Amidst Supply Shortage
Madrid, Spain – Housing โprices inโ Spain continue to climb, reaching all-time highs,โฃ with no widespread correction anticipated unless โขa critical supply shortage is addressed,โ according to recent analysis. The average priceโ of free housing โขrose 12.1% in โขthe third quarter ofโฃ 2023, disproportionately impacting those with limited financial resources.
Ferran Font,โ Studio Directorโค of stories.com, attributes the sustained price increases toโ a “structural tension” within โthe sector. “The sector is โฃdominated by structural tension: with solid and growing demand, but with a supply that is unable toโ close โthe gap,” Font stated. Heโฃ warns that failure to rectify โคthis deficit will lead to โincreasing residential exclusion.
The current market tension is already pushing demand towards โmore peripheral areas, located 30 minutes to anโข hour outside major city โcenters. While a “bonanza in the market especially due to rates” is expected to moderate price increases to 7.8% by 2026, and a โpotential easing of โthe mortgage boom is anticipated next year, Font emphasizes that “the rise in housing prices persistsโฆbut no signs of generalized correction as long as supply does not grow.”
The ongoingโ shortage particularly disadvantages young peopel, who “are forced to fight against a more solvent profile” and often rely on loans, gifts, or inheritances to enter the housing market. Despite a recent uptick in new โgrowth projects, Font notes thatโ “the โresidential deficit persists, and as long as it is soโฃ significant,โฃ it willโค be unfeasible to alleviate the pressure on prices.”