If you've been looking at the property market for some time and want a first or second home in Spain, you should take the plunge this year. Some factors suggest you should buy a property in 2024. According to experts, lower interest rates and banks' increased readiness to lend are some of the reasons that could help you decide to become a homeowner in Spain in 2024.
Reasons to buy property in Spain in 2024
Lower interest rates
Ana Villanueva, Tiko's Co-Founder and CEO Iberia, responds that a priori, the context for buying a home in 2024 will be better than in 2023. "With inflation under control, interest rates are expected to fall in the coming months, thus reducing the cost of financing the purchase of a home.
Private residence or investment
When considering buying a home in 2024, Jesús Duque, vice-president of Alfa Inmobiliaria, believes you should analyse different aspects depending on whether you want to use the property as a private residence or an investment.
In the first case, location and choosing the right property to suit our personal needs is essential. "From there, the key this year will be to find the best-priced property, bearing in mind that the chronic housing shortage we're facing does not foresee price drops, and to take very seriously the mortgage conditions – and the stability of the labour market – that we will be facing in the coming years.
Big investment
As for investment, which is a sure thing for many when buying in Spain, Duque says profitability is king. "Our recommendation is to get advice from a real estate advisor who can help you identify the areas with the best growth potential, diversify into property types – as the variety of flexible housing formats is growing – and understand the local laws and regulations, including, of course, the new housing law".
In this case, the expert comments that rental method innovation, such as coliving, can be interesting for real estate investors. And private buyers should monitor political stability, the existing levels of legal certainty for the investor, who in many cases becomes a "major holder", and interest rates.
For the head of Tiko, in addition, with the shortage of supply and rising rental prices, buying a property is a profitable investment, especially in large cities.
Factors to take into account
Beyond the context, buyers should consider their job stability, savings and the effort that debt would entail to take the step at the right time.
Ana Villanueva explains that the evolution of rent and purchase prices should be analysed to understand its possible future outlook. "These prices are linked to property demand. If we're talking about a standard house in a big city like Madrid, demand for the property is practically guaranteed to rise".
She also highlights analysing the borrowing capacity to access a mortgage and the mortgage terms.
"Finally, the buyer should be aware of governments' incentives (state and regional) to help homebuyers. For example, the Community of Madrid has started acting a guarantor for financial institutions to increase mortgage loans up to 95% of the mortgage".
Where will the best deals on house prices be this year?
For Duque, given the real estate market situation in 2024, the housing search must be strategic. As for the most economically booming urban areas, such as Madrid, Barcelona, Malaga, Valencia, the islands, etc., which continue to be attractive centres due to their business and tourist activity, Alfa Inmobiliaria's vice-president recommends looking in many of these areas where the city councils and regional governments are making great efforts to improve the environment, "either by improving existing infrastructure (think of Madrid's "Operación Campamento", or the urban developments on Repsol land in Malaga, or the creation of the Zeta District in the same city, to name a few)".
He believes there are still properties at affordable prices in and around these areas and expects them to improvement considerably over the next few years.
Tiko highlights that it is difficult to find opportunities at a reasonable price. "Many properties come on the market with price expectations above their market value, and it is necessary to be on the lookout for price reductions, which are necessary for seller and buyer to reach an agreement. On the other hand, there are situations in which the seller does not want to let the sale to take a long time, so it goes on the market with an adjusted value".
What are the experts forecasting for this year?
According to Tiko, interest rates are expected to fall in the second half of the year. "This will undoubtedly stimulate the economy, as the sale of second-hand housing will be reactivated and, at the same time, developers will have more confidence in the market so they will continue with their construction plans.
Moreover, in the context of more guarantees, banks will be more likely to offer good conditions to customers, so 2024 may be a good time to make one of life's most important decisions: to buy a home.
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