The real estate market is a kind of trip to the center of the Earth in which, as you progress, the pressure increases. And if the real estate planet has a center, it is that of the large cities, with Barcelona and Madrid at the head, where the demand is greater and, with it, the resistance to lower prices. However, there are already signs and opinions that point to the opposite after the continued increases in prices in recent years.
“We think that average office prices have to end up falling by 20% and that housing prices have to fall by 7%,” says Singular Bank's head of strategy, Roberto Scholtes, when asked about Barcelona and Madrid. “The market is very dry” because now “buyer and seller cannot meet,” he says. They will do it at some point and the forecast is that it will be throughout next year, in a cheaper place than the current one.
Scholtes' price drop forecasts are not the only ones, although there is no firm consensus among analysts, especially when talking about Barcelona and Madrid, the two cities with tensioned areas par excellence. On a national scale, Bankinter's prediction is that housing will become more expensive by 1.2% this year and will drop by 2% next year. These are subtle oscillations when compared to other European countries, where economic contraction and interest rate increases are directly affecting a real estate market that is more overheated than the Spanish one.
The latest quarterly report from the College of Registrars, published this week, shows that the average price per square meter in the city of Barcelona is now 4,318 euros, 0.8% lower than a year ago, while in Madrid there are still increases, of 4.3%, although its square meter is cheaper and stands at 4,017 euros. At the end of last year, prices rose by 6.3% in Barcelona city and 7.1% in Madrid, which shows that, at the very least, the slowdown is evident.
Where the registrars already detect decreases is in the quarterly comparison, although in this case the data does not correspond to the capitals, but to the province. In Barcelona, between July and September there was a decrease of 0.6% compared to the previous quarter, while in Madrid the decline is 0.8%.
The registrars give another clue about what is happening in the two largest Spanish cities. The capitals have reduced their weight of home sales with respect to their respective provinces, after several quarters of increase. It is a sign that demand is moving to the suburbs, where prices are already beginning to cool. There is no longer so much willingness to pay high prices.
In the case of offices, Scholtes detects a much more pronounced trend. Transactions, he indicates, have fallen by 72% in Barcelona and 34% in Madrid. “Sellers are reluctant to lower prices, but buyers are already waiting patiently for the adjustment to occur,” expected in the first half of next year, he says.
Regarding housing, Idealista continues to detect increases in Barcelona and Madrid, although its data is for properties for sale and not those finally sold. They measure desire more than reality. If there are price drops, the developer Culmia considers that they will be small. Her forecast is rather one of “stability”, since in the center of the real estate market, in the urban centers of the two cities, as she says, there is still little supply.