The accelerated rise in interest rates is beginning to take its toll on the real estate sector, and in the fourth quarter of the year home sales have fallen by 10.6% in Spain, compared to the previous quarter, and have forced owners to adjust prices. According to the data presented yesterday by the Association of Registrars of Spain, the price fell by 0.4% in the whole of Spain, with more significant falls in second-hand housing: 1.1% in the whole of Spain compared to the still rise, of 2.5%, in the price of new housing.
"The average price of housing has considerably slowed down its quarterly growth, while the year-on-year data continues to show significant increases" acknowledges the College. “We are heading towards a different, more complex market scenario, with a higher cost of financing and less favorable macroeconomic conditions –due to the rise in rates and the drop in family savings due to the impact of inflation– that will affect the expectations and, therefore, to house prices”.
In the last quarter of the year, prices fell in 26 provinces, and even in ten provincial capitals, despite the fact that their real estate markets are usually stronger than those of smaller towns. By autonomous communities, they only increased in the Balearic Islands (5.7%), Murcia (4.5%), Andalusia (1.5%), the Basque Country (1.4%) and Aragon (1.2%). By provinces, the greatest decreases occurred in Las Palmas (-11.3%), Badajoz (-10.1%), Cáceres (-9.3%), Pontevedra (-9.2%), Albacete (-8 .3%) and Huesca (-7.1%).
In the whole of 2022, 646,241 homes were sold in Spain, 14.5% more than in 2021 and the highest figure since 2008. The registrars highlighted the vitality of second-hand housing: with 531,589 transactions it reached its maximum since 2006.
By provinces, the registrars highlight that the drop in transactions has been widespread: activity has dropped in 44 of them. The greatest decreases occurred in Guipúzcoa (-23.9%), La Palmas (-23.2%), Zaragoza (-24.9%), Toledo (-22.6%), Almería (-20.6% ), Santa Cruz de Tenerife (-20%) and Valladolid (-19.1%).
In Catalonia, home sales have fallen by 10.9%, with a drop in prices of 0.6%. By demarcation, the greatest decline in sales occurred in Tarragona (-12.4%), followed by Barcelona (-12%) and Girona (-9.9%), while they rose 8.4% in Lleida . This demarcation was also the exception in the evolution of prices: they have risen 11.4% in the last quarter, compared to falls of between 0.1% (in Barcelona) and 1% in Tarragona.
Xavier Vilajoana, the president of the association of Catalan promotions APCE, expressed his confidence that the new construction market will remain strong despite the rise in rates. “There is little supply, and a strong demand that is also solvent. And financial entities are looking for formulas, such as mixed mortgages, that give consumers confidence to buy, ”he highlighted.
