Owners are accepting average discounts of 10% to accelerate the sale of their homes in the current context of general decline in transactions caused by the rise in interest rates, as explained by the director of studies at Pisos.com, Ferran. Font.
Font, in the presentation of his assessment of the situation of the residential market, recalled that real estate portals collect the prices that sellers wish to obtain, not the final price at which the sale is closed, and that this varies "depending on the moment." of the market, since in some the supply has more power and in others, like now, the demand." In his opinion, “the owners are reluctant to lower prices, but in the large markets we are seeing significant slowdowns in operations and in the negotiation they will have to give more” to accelerate the sale.
Font has pointed out that transactions have accumulated declines of close to 20% in markets such as Madrid or Barcelona, and that only the fall in the supply of housing for sale supports prices. “Since 2018, 100,000 housing construction visas have been issued per year and this year we expect the figure to grow by just 6%. It is barely half of the homes that are created, and barely 15% of the 600,000 visas that were issued on average per year before 2008.”
The Pisos.com analyst predicts that 2023 will close with around 585,000 sales, around 10% less than in 2022, and that they will fall another 4% in 2024, to 561,000 transactions. The rise in rates, which makes mortgages more expensive, and the disappearance of savings accumulated during the pandemic, to compensate for the rise in the cost of living due to inflation, make more potential buyers have to give up, "especially young people", which In turn, pressure on the rental market increases, at a time when “the supply has been sharply reduced, because the owners, faced with the limitations provided for by the Housing Law, have opted for other formulas such as seasonal rentals, or the rooms, or the institutional ones for the flex living.”
Font explained that rental prices will close the year with an increase of around 7%, but they are already beginning to moderate, even in the most stressed markets, such as Barcelona, Malaga or Alicante, where the increases have been more than 20%, so that by 2024 it is expected that rents will increase on average by 1%.
According to the portal's data, the price of rent is already falling in medium-sized towns, and that the increases are concentrated in large cities where demand coincides because they attract employment, because of their educational offer or because of their tourist attraction. “The rental market is more dynamic and flexible,” he recalled, and gave the example of Barcelona, with two quarters of falling contracts, while demand shifts to neighboring cities, where rents are lower. “That will moderate the city's income,” she warned.
