The price of new housing stabilized in the first quarter, despite the drop in sales. According to the Housing Price Index (IPV) published today by the INE, the prices of flats have grown by 0.6% compared to the previous quarter, with an increase of 3% in those of new homes sold and of 0. 2% in second-hand. In this way, prices reverse the fall they suffered in the last quarter of 2022, in which they fell by 0.8% compared to the previous quarter, the first setback since the pandemic.
Prices are holding up remarkably well in a context of falling sales: according to data published today by the General Council of Notaries, in April sales fell by 20.7% compared to the previous year, with 49,639 transactions. Until April, notaries indicate that 207,527 homes have been sold in Spain, 11.6% less than in the same months last year.
According to the data from notaries, the tightening of mortgage conditions is the key to the cooling of the market: in April the banks granted 21,884 mortgages, 31.9% less than in the same month of the previous year, and lent less each time. operation (142,306 euros, 6.4% less) because the increase in rates makes the weight of the quota unaffordable with respect to the salary of the applicants.
Compared to last year, the Housing Price Index decreases two points and drops to 3.5%. New housing accumulates in the last twelve months a rise of 6.0%, two tenths less than at the end of last year, while second-hand housing has risen 3.0%, an interannual rate that falls more than two points from the previous quarter.
Housing prices have risen in the first quarter of 2023 in all the autonomous communities, according to the INE, with the highest year-on-year increases in the Foral Community of Navarra, Cantabria and the Canary Islands, with increases of 5.8%, 5.6 % and 5.5%, respectively. For their part, Extremadura (1.1%), Castilla-La Mancha (1.6%) and Región de Murcia (1.7%), registered the lowest annual increases. In Catalonia, the interannual increase was 3.5%, higher than the state average, while in Madrid it was 3.1%, the sixth community with the lowest price rise.
Compared to the previous quarter, prices rose in all communities except Extremadura (–1.2%), Castilla-La Mancha (–0.8%), and Murcia (–0.1%).
In second-hand housing, however, there are more communities where prices have fallen in the first quarter compared to those at the end of 2022, highlighting Galicia (with a decrease of -1.2%) and Catalonia (-0.9 %).
It must be remembered that the prices of the new home correspond to the signing of the deed of sale of homes that were mostly bought off-plan, signing a deposit contract, more than a year ago, when they had not yet begun to harden the requirements to continue mortgages.
Ferran Font, director of studies at Pisos.com "2023 begins with a clear trend of moderate growth, which is especially accentuated in those less dynamic markets where there is no strong demand that pushes prices up."
Patricia Rodríguez-Lázaro, Clikalia's investment director, pointed out that "we are not contemplating a drop in housing prices in large cities due to the imbalance between the creation of new homes and the supply of new homes, together with inflationary trends." In her opinion, "until the imbalance between supply and demand is resolved, prices will continue to rise"
For María Matos, director of studies at Fotocasa, "there is still a latent demand that continues to keep the price up, and that makes the owners still resist lowering prices. Probably an important part of this interest that remains despite the sharp rate rises is because there are many citizens waiting for a big price drop to take place. A situation that is difficult to occur. What we will begin to see from the next few months is that the increases begin to be more restrained”.
