Spanish house prices fall -0.8% in 4Q22, first drop since 4Q20

madrid property bubble 1

Bankinter | House Prices fall -0.8% in Q4 (quarter-on-quarter) vs. +1.7% previously. It is second-hand housing that has suffered the most in this quarter (-1.4 q/q), while new housing continues to increase prices (+1.9% quarter-on-quarter). In year-on-year terms, prices have slackened to +5.5% in 4Q 2022 (year-on-year) vs +7.6% in the previous quarter.

Analysis team’s view: This is the first quarter that prices have fallen in Spain since 4Q20 (a year marked by COVID). This is due to: (i) Higher cost of mortgage financing, in an environment of rising interest rates; (ii) Lower household savings rate, due to higher prices in basic consumer goods (energy and food); and (iii) Less attractive investment in rental housing, with a yield similar to the Spanish 10-year bond.

We maintain our price decline forecasts: -3% in 2023 and -2% in 2024.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.