Home sales fell by 6.4% in May compared to last year, according to data published this morning by the National Institute of Statistics: with 56,137 homes sold, May marked the fourth consecutive negative month this year, with very of sales in La Rioja (37%), Comunidad de Madrid (20.5%), the Canary Islands (19.2%) or the Balearic Islands (17.1%).
Although 29% more homes were sold in May than in April, due to the effect of Easter, the real estate market is already suffering the full impact of the rise in interest rates. As explained by Paolo Boarni, CEO of the Tecnocasa real estate network, "the rise in rates has raised the average payment of an average mortgage by 46% if it is subscribed at a variable rate or 28% if it is subscribed at a fixed rate". fact that "thousands of buyers have been left out of the market: 17.8% of potential demand in a city like Barcelona, because the fee would exceed 35% of their family income, which is the effort limit accepted by banks to grant a mortgage.
The drop in sales, therefore, has hit markets where housing is more expensive and, within them, homes whose potential buyers have less purchasing power and are more dependent on a mortgage. Thus, according to INE data, in May the purchase of new homes increased by 4.1% compared to May 2022, while that of used homes fell by 8.6%.
For the same reason, the number of free homes transferred by sale decreased by 5.8%, while that of subsidized homes fell even more, by 13.4%, because potential buyers now find it more difficult to get a mortgage. In 38,536 transactions, both buyer and seller were individuals, 7.0% less than in the same month of 2022.
Home sales are holding up especially well in the autonomous communities of northern Spain, where family incomes are quite high and prices have not skyrocketed in recent years. This has been the case in May in Cantabria, where sales have increased by 21.1%, Principado de Asturias (8.6%) and Castilla y León (7.9%) and Navarra (3.7%).
In Catalonia, 9,000 homes were sold in May, 5% less than the previous year, and so far this year there have been 41,384 transactions, a drop of 3.3%. The demarcation in which the market has weakened the most is that of Girona, with a fall of 7.41% in May and that of Barcelona where the decrease was 6.59%, while the veins rose both in Lleida (10% ) as in Tarragona (0.5%).
In the first five months of 2023, 261,784 homes have been sold, 4.1% less than in 2022 and with only one month, January, with more activity than the previous year. The new construction market registered a fall of 2.4%, less than the 3.3% that sales of second-hand homes fell.
Ferran Font, director of studies of the Pisos.com portal, acknowledged that the data shows that "the cooling of the sector is an evident reality" and confirms the forecasts. In his opinion, the evolution in the coming months "will depend on the evolution of inflation, the level of the Euribor - which continues to make mortgages more expensive - and the uncertainty generated by the current electoral period, as well as the implementation of the new Law of Housing”.
María Matos, director of studies of the Fotocasa portal, highlighted that May is the fifth month of decline in sales "after 21 consecutive months of very large increases" due to the boom that occurred after the pandemic, so in her opinion sales current ones would have to be compared with 2019, before the covid, and they are 16.6% higher. "These are very high levels and very positive data, which show the great resilience of real estate in the face of economic disturbances."
