Spain's Real Estate 2023: Evolving Renting and Buying Real Estate

Feb 22 | 4 minutes read
spain property market

In a move to protect the growing number of renters in Spain from soaring rental prices, the government has made a crucial decision. The ruling Socialist party initially introduced a rent increase cap of two percent in March 2022, which was meant to be a temporary measure to combat rising inflation. However, the government has now agreed to continue limiting the amount landlords can increase rent for tenants throughout 2023, providing stability and peace of mind for renters across the country. This move highlights the Spanish government's commitment to providing affordable housing options for all, especially in a market where rental prices have been rising steadily in recent years.


Americans' Spanish Property Outlook

With the US dollar's strength, more Americans have been purchasing properties in Spain. In 2022, US nationals could buy houses in Spain that cost them 18% less than the previous year. Though there is economic uncertainty and inflation, the US dollar is predicted to remain sturdy by Wells Fargo analysts, but it will start to weaken by mid-2023. Hence, if Americans want to buy a property in Spain, they still have time to do so in early 2023.


Potential Limits on Foreign Property Buyers in Spain's Islands

The Balearic and Canary Islands are facing property-related issues such as housing shortages and overcrowding. In an attempt to address these problems, the Balearic government is debating the possible restriction of property purchases by non-resident foreigners, while the Canary Islands have also called for similar limits. Although the legality of such restrictions is uncertain, higher taxes and rules against Airbnb rentals are expected to curb the number of foreign property buyers.


Navigating the rental market in Spain: Challenges and Requirements in 2023

The Spanish rental market is facing several challenges in 2023, with increased demand and stricter requirements making it harder for tenants to find apartments. Landlords and agencies are imposing unrealistic demands, including a minimum income of €2,100 per month, an age requirement of over 35, and proof of non-stop work over the past two years. Shared accommodations are also becoming scarce, with a 45 percent decrease in available properties compared to the previous year.


Aspiring tenants in Spain must now navigate complex rules and prerequisites to secure a rental property, particularly in big cities. With the market becoming increasingly competitive, it is crucial to stay informed about the latest regulations and expectations to secure a suitable home.


Experts predict that 2023 will see the end of strong rises the Spanish property market has enjoyed in the last couple of years, during which both sales and prices rose at rates not seen since before the 2007 housing market boom. Though the overall number of property transactions (sales and purchases) looks set to fall by around 15 percent in 2023, the fall in house prices is forecast to be only 0.9 percent, according to Atlas Real Estate.


This may come as a relief to those looking to buy in Spain in 2023, as the market is predicted to be more stable and less volatile than in previous years. However, it is important to keep in mind that the housing market can be unpredictable and subject to many factors, including changes in government policies and economic conditions. Overall, 2023 is expected to be a more stable year for the Spanish property market, but only time will tell how it will ultimately fare.


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Get ready for a new housing law in Spain in 2023 that aims to tackle the issues of social housing shortage, vacant homes, squatting, and evictions. The law will also offer tax breaks to landlords who don't increase rent for tenants. Although the law has faced several hurdles, the Spanish government needs to approve it to receive billions from the EU's recovery fund. Stay tuned for more updates on this important legislation.


In 2023, the Spanish government will continue providing financial assistance to young people struggling with high living and rental expenses by extending its Bono de Alquiler Joven program. This program offers a rental allowance of €250 to individuals aged 18-35, given that their annual income is below €24,300 and their rent does not surpass €600 per month (or €300 for a single room).

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