Home sales fell 14.4% in August, to 49,252 properties, the seventh consecutive decrease, and the highest volume recorded since January 2021, according to data published today by the National Institute of Statistics (INE). The rise in interest rates and the difficulties in accessing a mortgage meant that August recorded the lowest sales volume for that month since 2020, in the middle of the pandemic, dragged down by the sluggishness of the second-hand real estate market.
According to INE data, the sale of used homes accounted for 80.9% of total transactions and fell 15.9% year-on-year in August, totaling 39,827 transactions, while the sale of new homes fell less, by 7.0%. 3%, up to 9,425 units, largely because they correspond to sales made off plan about a year ago.
In the first eight months of the year 413,000 homes had been sold, 6.5% less compared to the same period of the previous year, with a drop of 7.5% in the sale of used homes, while new construction fell. the 2%.
The drop in transactions affected all communities in August except Navarra (up 8.7%) and Asturias (3.7%), but it was especially large in the communities where property prices are higher: Illes Balearic Islands (–37.7%), Canary Islands (–25.6%), Community of Madrid (–22.9%), Catalonia (-17.1%) and Andalusia (-16.5%). According to the General Council of Real Estate Agents of Spain (APIS), “it is not surprising that the fall is accentuated in the country's main markets, as they tend to be the spearhead of trend changes, whether at the rise or fall.”
In the first eight months of the year, sales have already accumulated drops of 17.6% in the Balearic Islands, 17.3% in La Rioja; 14.2% in Madrid; 12% in Galicia; 9.5% in the Canary Islands; 9.3% in the Basque Country; 7.3% in Andalusia, with 16.8% in the province of Málaga, or 6.8% in Catalonia (with a 9.6% decline in the Barcelona district).
Real estate professionals noted that the drop in sales shows a “normalization” of the sector, after the sales boom that followed the pandemic. According to María Matos, Director of Studies at Fotocasa, “the trend of slowdown in sales is gradually being consolidated. Although it must be put into context that this double-digit decrease occurs due to the year-on-year comparison, with a true boom year, that of 2022.”
Francisco Iñareta, spokesperson for idealista, highlighted that “it is very possible that we will end the year around 600,000 transactions. This volume will be lower than that of 2022, but it will still be above the number of operations closed in 2008, which until last year had not been equaled.”
In August there were 33,631 purchases and sales made between natural persons, which is 15.2% less than in the same month of 2022, but the largest drop was recorded in transactions between legal entities, which fell 26.6%, in good partly due to the uncertainty surrounding the new regulation of large holders in the rental market.
Ferran Font, director of studies at Pisos.com, highlighted that “where the slowdown is not yet visible is in prices. However, it will most likely begin before the end of the year in those markets with lower demand. Other elements that will mark the evolution of the market in the short term will be the evolution of interest rates, the possible implementation of the new Housing Law and the complicated global political situation.”
