Location, location, location. This is and will continue to be one of the factors, if not the most important, that influences the price of a home. Whether you are buying as an investment or looking for the house that will become your permanent residence , knowing which cities will see the price of housing rise or fall will help you make your decision.
One of the real estate trends for 2023 is an uneven evolution of the price of flats. In other words, the joy will vary from neighbourhood to neighbourhood and there are cities where buying a house will be cheaper and others where it will continue to be more and more expensive.
In which cities will housing prices rise?
For 2023, experts predict a stagnation of prices at best and even a fall of between 2% and 9% depending on the sources. Of course, these figures are only an average.
There are cities where housing prices are not expected to fall, but rather the opposite. The reason? It is very simple: there is still more demand than supply of apartments for sale.
This is the case in large cities such as Madrid and Barcelona , where prices will remain stable and even increase due to high demand, explains ASPRIMA, the Association of Real Estate Developers of Madrid.
This interest will even vary by neighbourhood. According to data from the property portal Idealista, in addition to the capital, there is a greater relative demand in towns such as Getafe, Alcalá de Henares, Móstoles and Torrejón de Ardoz.
In addition to the two large cities, there are other coastal cities such as Alicante, Valencia and Malaga . The latter is one of those where prices have grown the most, not only in Spain but also internationally, even above cities such as Singapore, Dubai or Paris.
In general, the Mediterranean area continues to see high demand. Part of this is due to foreign investors looking for a second home or to invest in this type of property.
Other cities where demand exceeds supply and prices may rise are Seville, Las Palmas and Tenerife, as well as Ibiza in general terms.
This is the list of locations with the highest demand according to Idealista:
1 Madrid Madrid
2 Getafe Madrid
3 Alcala de Henares Madrid
4 Pamplona Navarre
5 Valencia Valencia
6 S/C de Tenerife S/C de Tenerife
7 Mostoles Madrid
8 Torrejon de Ardoz Madrid
9 Las Palmas de Gran Canaria Las Palmas
10 Saragossa Saragossa
11 Seville Seville
12 Parla Madrid
13 Malaga Malaga
14 Donostia-San Sebastian Guipuzcoa
15 Barcelona Barcelona
16 Torrent Valencia
17 Saint Bartholomew of Tirajana Las Palmas
18 Sant Cugat del Vallès Barcelona
19 Paterna Valencia
20 Palma de Mallorca Balearics
21 Ibiza Balearics
22 Badalona Barcelona
23 Santander Cantabria
24 Vitoria-Gasteiz Alava
25 A Coruña A Coruña
In which cities is the price expected to drop?
On the other hand, there are cities where a moderation and a fall in prices are expected . What these areas have in common is less economic activity or little tourist interest, which today are two of the main drivers of demand.
This is the case of communities such as Navarra, La Rioja, Castilla y León, Aragón or Galicia , where more significant price adjustments are expected.
By cities and areas, in Zamora, Palencia and Jaén a drop in demand is already being noticed and prices are being adjusted.
In these areas, demand will not be able to overcome other factors such as rising interest rates and the increase in mortgage costs, which will put downward pressure on supply.
Why you should take this data into account
If you are thinking about buying a house, knowing this information can help you define the best time to buy and put into perspective the urgency of closing the deal quickly or not.
This is an art that investors in rental housing have mastered, since, as they say in the sector, a good part of the profit is in the purchase . To better understand this, if you look for a price in a big city, you know that you have less room for negotiation than if you do so in towns where price drops are expected.
This gives you more room to negotiate the purchase if it is a second-hand apartment. For example, you can be more patient when searching or be more aggressive in your initial offer because you know that the apartment will take a while to sell if there is not so much demand.
In addition, it also helps you to orient your purchase in one area or another . In other words, it can help you look for a house in one location or another, taking into account the evolution of the housing price. In the end, choosing where you live, especially when you are young and buying your first home, will have a huge effect on your finances in the future.
Starting out in a more remote neighborhood or in a town outside the big city can give you a lot of financial flexibility for your future. Remember that there are mortgages for young people with better conditions or that can be longer.
There are also mortgages to buy a house to renovate , if you buy a house that needs some repairs, and mortgages to build your house , if you want to take advantage of the price drops in those areas with less demand.