Spain's real estate market is experiencing a notable surge in home prices, with key cities and coastal regions witnessing significant increases. This trend poses challenges for affordability, especially as the average price per square meter reaches new heights.
Rising Prices Across Key Regions
The residential property price in Spain rose to an average of €2,120 per square meter by May 2024. The growth reflects substantial demand from both domestic and international buyers, with Madrid, the Balearic Islands, and Málaga leading the price hikes, seeing increases of over 10% annually.
The Supply Demand Imbalance
The market's current dynamics are heavily influenced by a scarcity of available properties. The situation is exacerbated by the aftermath of the pandemic, which keeps the number of properties for sale below pre-crisis levels, thus sustaining upward price pressures.
Impact on Buyers and the Rental Market
As financing costs rise, many potential buyers are turning to the rental market, which is becoming an attractive alternative amid tighter financial landscape and competitive buying conditions. This shift is particularly evident in major cities and sought-after coastal locations.
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