Spain Monthly Market Review - January 2024

The Spanish housing market saw continued growth to start the new year, with home sales increasing 4.2% year-over-year in January. This marked the 11th consecutive month of annual sales increases, as the market continues to recover from the pandemic-induced slowdown.

The median home price in Spain rose 3.8% compared to January 2023, reaching €240,500. Price growth was strongest in major cities like Madrid and Barcelona, which saw year-over-year increases of 5.1% and 4.6% respectively.  Moderating mortgage rates and steady demand have supported the upward trend in home prices.

In the commercial real estate sector, the outlook is more mixed. The office market remains challenged, with vacancy rates elevated in many urban centers as companies reevaluate their space needs.  However, the industrial and logistics segments continue to perform well, driven by the growth of e-commerce.

Investors are closely watching the impact of rising interest rates on commercial property valuations and transaction activity. Some owners are exploring strategies like redevelopment or repurposing to adapt to changing market conditions.

Overall, the Spanish real estate market is navigating a period of uneven recovery, with residential showing more consistent strength compared to certain commercial sectors. Affordability and economic factors will be key drivers in the year ahead.