How to know if a home is being sold at a fair price in Spain

Buying or selling a home is one of life's milestones, as it requires a major investment and many hopes and dreams are poured into it. However, a great deal of stress is also involved. Preparation is needed for everything to run smoothly and for the transaction to be successful. What price should you sell the house for? Is it above the market value? Is it a fair price?

How to know a property's price in Spain?

Several internal factors –  so to speak – influence a property's price. For example, its location, characteristics, facilities, surface area and the condition. But it also depends on external factors, such as previous real estate operations in the area, the average price per square metre in the neighbourhood, etc.

Comparing the property with others with similar characteristics is the best way to work out if the flat you're going to buy or sell is appropriately priced or not. Check it against properties with similar characteristics, i.e. the same square metres or type. This analysis is decisive in knowing if the house price is appropriate.

If you don't know if the property is cheap or expensive, you can ask a real estate agency to help you with the operation or make a comparative analysis. For example, you can use idealista to filter properties in the property's location, compare features and analyse the price range.

Knowing if a flat's price is fair: the market's behaviour

Another useful method to determine if a property's price is appropriate is to know the average selling price in Spain and different autonomous communities and learn about the market's behaviour, i.e. if the property prices are going up or down, etc.

idealista prepares the monthly report “Price evolution of housing for sale in Spain,” which compiles the average property prices in Spain's autonomous communities, provinces, cities and districts.

According to its latest report, the average per-square-metre price in Spain in January 2024 was €2,056, 7.2% more than the same month in 2023.

Carry out a valuation

Hiring a qualified appraiser or valuer in Spain is one of the best ways to know if a flat is correctly priced. Factors such as location, layout, access roads, public services and state of conservation are assessed to value the property. Other important aspects are the built and useful surface area or the facilities (swimming pool, lift, etc.).

2024 PER in Spain

The price-earnings ratio (PER) is another method to calculate if a house or flat is expensive or cheap. Investors usually use the PER to know if a company has a valuation at an attractive price. If the result is less than 15, it is considered attractive, but if it is greater than 20, it is considered high.

For housing, the PER calculation is used to value the property's selling price and know how profitable it would be if rented. To do this, the sale price is divided by the annual rent. For example, if a flat is sold for €200,000 and can be rented for €1,500 per month (€18,000 annually), the PER would equal 11.1. That means it would take just over 11 years to recover the investment.

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Tools for calculating a property's price in Spain

A property's rateable and market values are key to calculating its estimated price. Normally, you should try to sell above the rateable value, as this only takes into account objective values, so a flat's market value will be above it (it is recommended that the rateable value is 50% of the market value). 

The market value takes temporary factors as a reference, such as demand, the area or the economic situation. To sell a property more profitably, always look at the latter.

Find out if the property price is fair

With the idealista property valuation tool, you can discover if a property's price is appropriate in three steps. You can obtain a detailed estimate using the property's description, which allows you to obtain a greater advantage for future negotiations.

What happens if I buy a flat below its value?

Buying a flat for less than its rateable and market value can negatively affect the buyer and the owner in matters such as paying Property Transfer Tax (ITP). When you pay less than its actual value, the Treasury may claim the corresponding part of the fee with a surcharge in the event of delays.