6 reasons to understand why house prices in Spain are at odds with Europe

is becoming the main reason for the strengthening of house prices in Spain. Although rising interest rates have made access to real estate more difficult and reduced some of the demand, supply is still not enough for those interested in buying. "Supply has been growing too slowly for several years now to meet demand," said economists at ING Economics.

Logic suggests the situation should be reversed.

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Higher prices have a direct impact on mortgages (-18.8%) and home purchases (-10.5%), which have both been on the decline for six months, according to the National Institute of Statistics (INE), but the slowdown in both statistics is weaker than in other countries.

The difference lies in the peculiarities of the Spanish market''real estate. "There are several elements that distinguish the Spanish real estate market from other markets in the eurozone, above all the unique ability of buyers" say the analysts, highlighting six factors: strong growth in the number of households, the resilience of the economy, a tight labor market, strong demand from foreign investors, rising construction material costs and moderate house prices during the pandemic. All of these factors explain why the Spanish real estate market continues to grow despite a general downward trend in other countries.

Factors such as rising mortgages and slowing economic growth are expected to moderate the dynamics of the Spanish real estate market in the near future.