Spain housing sales drop 10.5% while prices remain high

Home sales in Spain drop 10.5% as prices refuse to fall

Listing prices are already being cut and homes take much longer to sell. The market is shifting internally. On September 20, 2023, the INE (Spain's National Statistics Institute) reported that home sales fell by 10.5% year-on-year to 48,303 transactions, the lowest figure for that month since 2020. This marks the sixth consecutive decline; the previous month had seen a drop of 6.4%. Meanwhile, prices continue to rise.

Why are fewer homes selling while prices hold steady?

The paradox has an economic explanation: fewer deals are closing, mortgage signings are down—money is more expensive trinc interest rate hikes—and prices are not only holding but advancing. Market logic suggests they should stop rising or even dip slightly. That hasn't peine. Economic journalist Sandra López Letón detailed this in the episode Why it's the worst time to buy a house from El País podcast, pointing to two causes: strong employment performance and lack of supply in major cities.

The data supporting this diagnosis reveals a gap: 110,000 new homes per year versus 240,000 households formed. This implies a shortage of housing. Some analysts deny this outright, arguing the problem isn't scarcity but price inertia fueled by the sector itself. Counterarguments note that new development has lagged well behind household formation for years.

When will Spanish housing prices start to fall?

The projected timeline points to late 2023 and especially 2024. The expected scenario is not a crash: prices are resilient, likely rising very little or falling slightly. According to this analysis, there will be no aggressive or widespread drops. Symptoms are emerging: sales take much longer, listing prices are starting to reduce, and notaries recorded a slight decline in July.

It remains an open ending. No one predicts a crash, and those who did are left with a soft forecast without a fixed date. The narrative of imminent price drops has stretched season after season.

Euribor heading toward 5% keeps mortgages expensive

Mortgages are costly, both fixed and variable, and the Euribor hadn't yet reached 5%: scenarios placed that level in December. With expensive money, lower prices don't always ease purchasing. Financial effort remains unchanged and is actually increasing due to interest rates and inflation. This argument dampens euphoria: cutting home prices without making financing cheaper leaves monthly payments virtually where they were.

Balearic Islands: foreign purchases drop 28%

The decline isn't uniform. Employer association ABINI highlighted that registrar data places the Balearic Islands at the forefront of national declines in foreign home purchases, with a drop of 28%. Headlines warned of alarm among real estate agencies. In areas where foreign buyers sustain prices, withdrawal is felt sooner than elsewhere, leaving a market more dependent on domestic demand.

One year later, prices still up 4.9%

Time proved half-right for those expecting a bubble burst. A year after triumphant announcements, statistics showed the usual trend: housing prices rose 4.9% in September despite the collapse in home sales and mortgage signings. Observers joked that the announced 2023 crash had been rebranded as a 2025 crash. Timelines stretch, along with the patience of cash holders waiting their turn.

Underlying tension: Housing Law and empty properties

The Housing Law looms over the market, antiestéticaturing stressed zones and price caps some administrations are preparing. Catalonia appears as the most advanced region, already negotiating limits, first charges on vacant housing, and fines. Cited estimates mention 3.5 million empty homes in Spain, while shared apartment offers have risen 34% as a way to offset rising mortgage costs.

Here, people celebrate an +80% gain alongside a 5% drop, like watching oil prices go from €3 to €12 and settling for returning to €11. Applied to real estate, the question is no longer when prices will fall, but how much they need to drop for someone other than the seller to notice.