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Listing your house at the right price | COVID-19

As Spain’s residential property market regains some semblance of normality following several weeks of paralysis, many homeowners are wondering what will happen to the value of their property. The question for many is whether to sell now or wait to see what happens to prices over the next few months.

Most homeowners who already had their homes on the market prior the pandemic are in 'wait and see' mode, but there are some owners who have been forced to sell as soon as possible because they need liquidity urgently.

So, what is the “right” behaviour to adopt? How can you list your house at the right price, not too high, not too low, so that it gets sold without being an unnecessary bargain?

Property Market

A Bizarre Period Is Coming

Property experts are predicting that most buyers will wait between six and twelve months before beginning their property search. This, in turn, will cause a temporary imbalance between supply and demand. Most experts concur that there will be a short-term price correction followed by a subsequent rebound. Bankinter are predicting a modest fall of around 6% whilst others are forecasting declines in prices of up to 20%.

Are Spanish Property Prices Too High?

Prior to the current crisis many property experts already felt that the Spanish residential property market was overvalued and that prices in popular areas, such as the major cities and desirable second home coastal destinations, had already peaked. If this is the case, any decrease in property prices could be viewed as a catalyst to a much-needed price adjustment. Unlike what happened in 2008, few forecasters this time around were predicting a crash due to Spain's tighter regulations on lending. Similar to twelve years ago, however, property prices are not expected to tumble overnight, except in the few cases where there is a real need to sell.

Sellers Have No Intention of Lowering Prices

"Most developers and real estate agents currently have no intention of lowering prices,” comments Gonzalo Bernardos, Professor at the Department of Economic Theory at the University of Barcelona. “They are waiting to see what happens." But in the longer term, he is expecting that declines will be significant. “After three months of economic stagnation, prices will fall by 13% in Spain and between 7.5% and 9% in Barcelona and Madrid.”

Bernardos believes that if prices do not go down significantly, there will be few willing buyers. "As early as February 2019, before the coronavirus crisis broke out, homes were overvalued. Owners would be asked how much they wanted to sell their home for and if they said €330,000, their home would be marketed at €350,000 with the idea of negotiating until the desired price was reached. But in recent months, there has been a stark difference between the initial listing price and the final sales price.”

Listing Prices Are Up to 20% Above Market Price

According to data from the end of 2019 from the Spanish International Realty Alliance (SIRA), a Spanish body that represents the National Association of Realtors (NAR), some listed re-sale homes on portals were up to 20% above the market price. This may still be the case, if not more so.

After four years of growth, the Spanish property market contracted slightly in 2019. Data from the Spanish Department of Development (Fomento) shows that the number of property sales during 2019 went down by 2.5% year-on-year, a statistic reflected throughout almost all regions and cities in Spain. Regions popular with foreign buyers including the Balearic Islands (down by 10.4%) and Málaga Province (down by 10.5%) registered some of the most notable decreases.


In 2019, average sales prices across Spain went up by 4.6% year-on-year, according to Idealista. But the rate of growth has slowed – in 2018 annual price growth was 8.2%.

The Three D’s

Buyers should probably start paying attention to properties that are now coming onto the market, as they will be priced according to current market conditions. There are few homes coming onto the market, but this is expected to change in the next few months, especially due to the three ‘Ds’ – Death, Debt and Divorce.

Property prices are also inexorably linked to economic growth and unemployment. Both the IMF and ECB have predicted a recovery by the second quarter of 2021, but this also depends on the generosity of the EU with regards to economic aid.


H2 Title: If You Want To Sell, Better Lower The Price Now, Rather Than Wait And Sell For Even Less


“Real estate reacts later when it comes to lowering prices and hence recovers later,” adds Barnados. “If the economy rebounds in the third quarter of 2021, there will be small price increases by the end of that year.” He does not believe that the price levels of 2019 will be reached until at least 2023, however.


Bernardos insists that both agencies and sellers need to wake up to what is happening. “The time has come for agencies and intermediaries to try to convince owners that they have to lower the price if they want to sell their home. A drop of 10% can make a home an attractive asset."


A very important final advice: when a crisis happens, prices can slide for 8 consecutive years, like it did in Spain from 2008 to 2015 (
Tinsa). So the question for all of us is the following: would you rather discount your property by 10% and sell it within 6 months, or refuse to discount it now, and have to discount it 41% in 8 years? Because this is exactly what happened last time. Indeed, average property prices were at €2,048/m2 at the end of 2007. A year later at €1,890 (-10%), a year later at €1,760 (-15%), until they hit rock bottom in 2015, at €1,200/m2 (-41%).
Naturally, the past doesn’t tell the future, but it should at least help us consider some important decisions we have to make, including to list properties at the right price, to sell fast.