Housing prices in Spain are expected to drop by 5% by 2024, while the volume of commercial transactions will decrease by 10%, according to donpiso.

The average price of real estate is expected to decrease by 5% by 2024 due to a "significant" drop in demand for home purchases anticipated in the first half of the year, according to forecasts from the real estate agency donpiso, published on Friday.

In turn,a network of agencies predicts, whatpolitical and economic situationIn Spain, this will lead to annual declines in the number of real estate transactions exceeding10%in the first half of 2024.

Deputy General Director of donpiso Emiliano BermudezIt explains that this "downward" trend is a "logical" result of several factors, including the rising cost of living and mortgages, the lack of economic and legal security for real estate investments due to the Housing Law, the formation of an "unstable" government, as well as the cyclical development of the housing market, which experienced a "noticeable" growth during the periods of 2015-2019 and 2021-2022.

According to donpisoThe most dynamic markets will continue to be major capitals such as Madrid, Barcelona, Malaga, Valencia, Seville, and Bilbao, as well as their metropolitan areas, along with the coast of the Valencia Community, Andalusia, andMurcia.

Bermudez indicates that Spain is currently in a market contraction phase, and housing prices are stabilizing, "therefore, no deflationary process is observed in the second half of the year." However, it is estimated that the housing price, which rose by about 3% last year, "is likely" to end the year with an increase of less than 3%.

Donpiso also notes that there is currently "some equilibrium" in the market between supply and demand in the real estate buying and selling segment, despite inflation, and that there has been a decline in the number of transactions and housing prices, although these changes have been "less noticeable" than expected.

In this regard, Bermudes regrets that the measures taken regarding rentals after the enactment of the Housing Act "do not contribute to the growth of investments in real estate."