It is anticipated that housing prices will peak and the rise which started five years ago will end. This is what experts believe and they predict that during 2020, the slowing down, which started at the end of 2019, will continue in our real estate market. This forecast confirms what we said some weeks ago about 2020 being the year of moderation regarding real estate. If we focus on prices, experts point out that during 2020 rises will be very moderate, up to around a maximum of 3%. If this forecast is observed, then we can speak about a normalization of the Spanish real estate market. As in 2019, a rise in prices have started to slacken with regard to previous years. This means that the prices of our real estate will stop being revised upwards, and they may even drop, in some cases, if the rise during these last years has been very sharp.

TOWARDS STABILIZATION

Real estate experts believe that the trend in 2020 will be the stabilization of our market. This does not mean that the number of deals will drop; on the contrary, many analysts predict that in 2020 we could continue on the path of growth provided that political tensions do not contract the market. With regard to price increase, if as predicted, it is around 3%, the moderation of our real estate market will become patently clear. We will have gone from a 7% increase in 2018 (the sharpest rise since prices increased), to 5,6% in 2019 and finally 3% in 2020. We must bear in mind that we are speaking about the national average and the main cities like Madrid or Barcelona usually stay out of it. What really has to do with the greater price increase in these two cities is the issue of land scarcity. Because of this, a significant adjustment of prices regarding new housing is not expected in Madrid and Barcelona. However, second hand property could adjust prices downwards.

MADRID AND BARCELONA: SYMPTOMS OF EXHAUSTION

Experts agree on pointing out that we can see symptoms of exhaustion, regarding real estate, in our two main cities, Madrid and Barcelona. This could be normal if we take into account that both cities, in some areas, have gone beyond the prices reached in 2007 which was the highest peak before the burst of the real estate bubble. The most logical thing, in these two cities, would be for prices to slow down and that there is not a significant rise neither in buying and selling nor in renting. Nevertheless, experts disagree on this issue as some doubt that the stagnation  of prices will take place in Madrid and Barcelona as they are very much in demand by real estate investors. We will see who is right at the end of the year.

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