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Prices up, demand down, or what the third quarter of 2023 looked like on the real estate market in Spain

Tatiana Pekala Tatiana Pekala |

One might be tempted to sum it up in one sentence: prices up, demand down. The number of registered property sales in Spain decreased by -7.8% in the 3rd quarter and property prices registered a quarterly increase of 2.41%, marking the highest historical level.

Why are property prices in Spain rising?

A report by states: “real estate prices registered a quarterly increase of 2.41%, marking a historical high of 2.76% above previous highs in 2007. The year-on-year growth was 5.96%.”

Why did this happen? The first answer that comes to all of us is: "inflation". And that's true, but not the whole truth. Francisco Iñareta, spokesman for the Idealista portal, commented:

“Neither a decline in sales nor an increase in financing costs - one of the parameters that currently has the greatest impact on the real estate market is the lack of supply of apartments for sale, a phenomenon common throughout the country, resulting in a continuous increase in prices in most markets.”

In fact, after record levels of real estate sales in 2021/2022, the market is drained of interesting offers at reasonable prices. If an interesting offer appears at a market price, it disappears like a golden dust. This applies primarily to the secondary market, although even on the development market it is difficult to find an interesting property ready to move in. Developers are naturally still building, so the number of apartments and houses is increasing, but many customers cannot and do not want to buy from the plan. That's why new properties, but ready for collection immediately or soon, are so highly valued.

In which regions of Spain were the price increases the highest?

In the third quarter of 2023, prices increased in 11 autonomous communities. The largest increases were recorded:

  • in the Canary Islands, where sellers raised their expectations by 4%,
  • in the Valencia region 2.2%,
  • in Andalusia and the Balearic Islands 2%. 

The three autonomous communities of Andalusia, the Canary Islands and the Balearic Islands set historic price highs this quarter.

Fun fact!

The most expensive capital among the autonomous communities of Spain is… San Sebastian with a price of EUR 5,355/m2, then Barcelona at EUR 4,155/m2 and only in third place is Madrid with an average price of EUR 4,037/m2. For comparison, in Malaga the average price per m2 was EUR 2,625 in the third quarter of 2023, which means an increase of 13.3% compared to the same period in 2022.

Demand for real estate is down - why, where was it greatest and who bought the most?

The number of registered real estate sales decreased by -7.8% in the 3rd quarter to 140,160 transactions. Declines were recorded both on the secondary market with 114,978 sales and on the primary market with 25,182 transactions. 

Referring to the 3rd quarter of 2022, a record year in every respect for the real estate market in Spain, the decline in sales recorded a solid -16.5%. It is known that the earlier boom in this market was caused by two phenomena that can hardly be considered standard: first the pandemic, and then the outbreak of the war in Ukraine. It was also known that the impact caused by them could not be sustained in the long run. We observe that in terms of sales dynamics, the market is returning to the level from before 2020

If we look at the share of foreign investors in the Spanish real estate market in the third quarter of 2023, we can see that the statement "downward demand" is not true. It turns out that foreign demand for Spanish real estate continues to grow. In percentage terms, it recorded a quarterly increase of 0.5%, ranking at 15.44% of all sales. This is the second highest result in history.

As usual, the British lead the ranking with 10.11% market share, followed by the Germans and the French. 

Poles were in 9th place in the ranking with a 3.7% share in the number of transactions made by foreign investors in Spain. They purchased 800 properties in the third quarter of 2023. 
The provinces that were most popular among foreign investors were:

  • Alicante (Costa Blanca) with 43.76% of transactions,
  • Santa Cruz de Tenerife with 36.58% of transactions,
  • Malaga (Costa del Sol) with 35.33% of transactions.


The real estate market in Spain continues to arouse great interest among foreign investors and is perceived by them as a place to safely invest capital. Gradual stabilization is forecast for 2024, which will open the way to new investment opportunities. Madrid remains the preferred investment destination, accounting for 52% of investments, followed by Valencia 9%, Malaga 7% and Barcelona 7%.

See also

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