Opposing forces affect the real estate market. The repeated rises in interest rates have triggered the Euribor, which exceeded 3.3% in January. Added to inflation -at 5.8% in January- they mark a probable destination of reduced demand for housing: with more expensive mortgages and less purchasing power, a percentage of buyers can no longer acquire a property. This is not to mention that the requirements for banks to grant loans have also been tightened.
"We believe that the Euribor could fluctuate between 3.75% and 4% during this first quarter," say the specialists at HelpMyCash.com, a website dedicated to real estate and financial comparisons. And they warn that the evolution of mortgage interest depends on the decisions made by the European Central Bank in relation to interest rates in the coming months and the consequent containment or not of inflation.
At the other extreme, however, real estate is facing a lack of housing supply. In Barcelona, for example, new construction projects approved in 2022 were 48% less than in 2021 and 38% less than in 2019, before the pandemic. This is indicated by the Cole·legi d'Arquitectes de Catalunya in its annual report.
What is the effect of this phenomenon? That part of the demand for new housing can be transferred to the second-hand market, offsetting, at least in part, the impact of the rise in the Euribor.
HelpMyCash experts ensure that many owners are bringing forward the sale of their home to avoid uncertainty and the possible price correction -albeit moderate- that could occur in the coming months. Others, who are in no hurry to close the deal, end up choosing to rent over sell.
Ana Villanueva, CEO for Iberia of Tiko -a company dedicated to the direct purchase of properties-, agrees. “We have not noticed a considerable variation in the requests for offers. The owners remain very interested in selling their home quickly and without stress. In fact, the uncertainty about a possible drop in prices can lead many owners who were not in a hurry to sell their home a priori to have it, ”she asserts.
Regarding the interest of foreign buyers, Roman Traversino, Commercial Director in Barcelona of the J'Achete real estate agency - specialized in French-speaking buyers -, assures that in January they have had a record number of requests from buyers. "We see a lot of interest in the Spanish market," he asserts.
Villanueva assures that the evolution of the real estate market is still uncertain, but they do not foresee radical changes. “The rise in interest rates and inflation make potential buyers decide to back out, reducing demand and pushing prices down. On the other hand, the problem of lack of housing supply is well known, especially in the main cities, which continues to push prices up”, he assures.
Traversino maintains that foreign buyers continue to be the protagonists of a high percentage of operations in Spain. "We believe that this year their proportion will increase, since they tend to have more attractive profiles for banks and a greater capacity to buy cash," he says.
In this context, from HelpMyCash they advise asking for real estate advice to mediate the sale of a home. "Issues such as the choice of the starting price or the negotiation are now much more important to bring the sale to a successful conclusion," they conclude.
