Factors That Will Affect House Prices In Spain

 Spain is a beautiful country that has contributed to the Spanish language, culture, and cuisine worldwide. Spain's economic growth over the past decade has also helped it achieve one of the highest GDP growth rates in Europe. The economy of Spain remains solid as it continues to benefit from a favorable demographic profile with a high proportion of youth and investment.

Factors That Affect House Prices In Spain

Interest Rates

The interest rate is one of the main factors that can influence house prices in Spain. In general, the higher the interest rate, the lower the price of a property.

The current economic climate in Spain is characterized by an economic growth of around 2% per year for the past ten years, which means that the country has returned to its pre-crisis levels. This means that there is no need for changes in mortgage rates or other financial products related to housing.

Economic Growth

Another important factor affecting house prices in Spain is economic growth. The economy of Spain has been growing steadily since 2008 when it was hit by a financial crisis and experienced negative growth rates for several years.

Since then, however, things have improved significantly and there are no signs of worsening conditions in 2019 or 2020.

Unemployment

Unemployment is the most important factor that will affect house prices in Spain. There is a high unemployment rate in Spain, which means there are many job opportunities for people to get a job. If you are looking for a job, then you can consider getting one in Spain because there are many companies hiring people all over the country. This is one of the main reasons why there has been an increase in house prices in Spain recently.

Inflation

The other factor that affects house prices in Spain is inflation. When there is inflation, it means that prices of goods and services go up every year because more money is needed to buy them. This causes an increase in prices and also makes homes more expensive to own or rent out. The higher inflation rate has led to an increase in house prices because people need more money to buy houses or apartments due to their rising costs of living.

Supply and Demand

In theory, there are no shortages of houses in Spain. The Spanish government is encouraging people to own their own homes by offering tax breaks and other subsidies.

However, other factors could affect the supply side of the equation. For example, according to some newspapers, the construction industry has been suffering from an economic crisis for several years now. That could mean that fewer new houses will be built over time.

Seasonality

The Spanish economy is dominated by tourism, which accounts for 12% of GDP, and the growth of the construction industry. Tourism is considered a positive factor in the housing market because it brings people to an area, which in turn creates demand for properties. However, due to the economic crisis and a rise in unemployment rates, tourism has been decreasing over the past few years. This has also led to decreased construction activity since many contractors have stopped building houses or apartments because they cannot afford to buy materials and hire staff.

Exchange rates

As with any other country, Spain's currency affects its real estate market. Suppose you are looking to purchase property in Spain but do not know how foreign exchange affects prices. In that case, you must know what exchange rate fluctuations can affect your decision before making an offer on a property.

New property builds

In Spain, there have been a lot of new builds in the past few years. This is an important factor for house prices to increase. Because of this, it is more likely that you will be able to find a property that you want to buy if you wait a little longer than usual.

Regulation and taxes

The government has introduced a tax on foreign investors who buy properties in Spain. This is known as the ‘Impuesto Sobre Transmisiones Patrimoniales’ (ITP). However, it has been reduced from 15% to 5% and more changes are expected in the future.

If you want to buy a property in Spain but don't want to wait any longer than necessary then it's important that you look at buying or renting out your current property until prices rise again.

Conclusion

House prices in Spain continue to drop. How low will they go? It depends on any number of factors, including government policy, potential interest rate changes, and the market in general. The housing sector recovery won't be quick or easy, but with the right combination of factors pushing prices back up, things could be on the up and up once again before long. If you want to buy a house and make a good investment for the future then you need a good property agent that helps you buy a good house, and you should consider makoo as your best option. Makoo is a complete property portal covering the entire property cycle. We offer an extensive selection of houses for sale in Spain with detailed descriptions, images, and maps. We can locate you the perfect home in Spain, from self-catering flats, holiday villas, and luxury projects with sea views to plots of land with mountain or countryside views.