We analyse everything that has happened in 2022 to give you our forecasts for Costa Blanca property prices in 2023.
2022 will be remembered as one of the most dynamic years for the real estate sector. A desire to move house has driven the more than 600,000 sales that the year is expected to close with.
This real estate boom, which began in the second quarter of 2021, looked likely to be jeopardised by the outbreak of the conflict in Ukraine. However, the real estate market has managed to continue its upward trend in terms of both the number of transactions and property prices.
But what will happen to property prices in Costa Blanca in 2023? How will inflation and the measures taken by the European Central Bank to raise interest rates affect the property market in this area?
A slight reduction in prices
As the following graph extracted from the real estate portal Idealista shows, the price of property in Moraira, the municipality where our real estate office is located, has experienced a sharp increase over the last 5 years.
Furthermore, over the last year, property prices in the municipality have risen by 13.9%, from an average price per square metre of 3,103 euros in November 2021 to 5,535 euros per square metre just one year later.
However, the price of property in Costa Blanca is not expected to continue with the same evolution in 2023, and it may even decrease slightly. According to Font, director of research at pisos.com, property prices will move in a range of between 3% and -1% depending on each area and the behaviour of the CPI. This means that we will be in a more moderate scenario, but not one of major falls.
Slowing of the market
We are used to a 2022 in which homes sold very quickly. Before we even marketed a new property in our portfolio, we already had several buyers registered in our database with similar demands to what the new property offered.
During 2023, demand will continue to play a major role in the housing market in Costa Blanca, but properties will remain on the market for a longer period of time. The work of a real estate agency during this period will be paramount to prevent the property from burning out on the market, causing buyers to be unwilling to pay as much for it.
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Difficulty in obtaining financing
The increase in interest rates leads us to expect a slowdown in sales and purchases over the next few months due to a tightening of the criteria for granting risk by financial institutions and an increase in the cost of mortgages.
Both factors will add to the expectations of an economic slowdown causing purchase intentions to change for some households.
This scenario may affect the Costa Blanca property market, however, it will not be significant because the main buyer in this area does not need financing for their purchase and, if they do need it, they have typically already secured it from their country of origin.
Investment to alleviate inflation
The CPI stood at 6.8% in November 2022, having reached its highest peak in August 2022, when it rose to 10.2%.
At a time of inflation such as the present, investing in property becomes an interesting way to protect oneself against the loss of purchasing power. The price of housing adjusts to the level of inflation so that any increase in the price level generally means a similar increase in the price of housing. This is true for both sale prices and rental prices.
However, not all properties revalue at the same rate as other consumer goods. A lack of modernisation of the property, inappropriate marketing of the property or an unattractive location can cause us to lose out on a significant economic return.
To avoid this situation, the work of a specialised real estate agency in the region becomes essential, especially when such a large amount of money is at stake.
If you want to invest in property in Costa Blanca in 2023, you can contact Hispania Homes. For the time being, we leave you with a Sales Guide where you will find the best practical advice to achieve a profitable sale.