Buying a home today is 8% more expensive than a year ago, according to data published by the National Institute of Statistics (INE), but the rise is beginning to slow down: the annual rate of increase has fallen by half a point (in March it reached 8.5%) and even more in the case of new housing, which in six communities even lowered prices and has reduced its year-on-year rate of increase by 1.3 points, to 8.8% per year.
The slowdown has also reached second-hand housing, although with less force, and the year-on-year rate of increase in second-hand flats has risen to 7.9% in the second quarter.
The Housing Price Index published today by the INE registered a rise of 1.9% in the quarter, the second lowest since the restrictions on mobility imposed by the covid were lifted in the second quarter of 2021 and began to normalize the economy. The prices of new housing barely rose (0.1%) and it was the revaluation of used housing (2.3% in the quarter) that continues to put pressure on prices.
The slowdown in the real estate market, caused by the war, the increase in inflation, the darkening of the economic outlook and the incipient rise in the Euribor has been generalized: prices are slowing down in all the autonomous communities, although they are still rising compared to the first quarter .
The greatest increases occurred in Illes Balears, Castilla-La Mancha and Principado de Asturias, with increases of 2.9%, 2.5% and 2.5%, respectively. For its part, the Community of Madrid (1.2%), Navarra (1.2%) and Aragón (1.4%) recorded the lowest quarterly increases. In Catalonia, housing rose by 2.0% compared to the previous quarter, which leaves the year-on-year increase at 7.2% compared to 7.7% in the first quarter.
Paradoxically, the greatest weakness in the market has been in new-build developments. The difficulty of meeting the sales rates and the desire of the promoters not to accumulate stocks in the face of the poor outlook for the economy has even led to reductions in housing prices. This has been the case in the Canary Islands (new housing has fallen by 1.3% in the quarter), Cantabria (1.2%), Aragón (1%), Community of Madrid (0.9%), Extremadura (0 .8%) and the Basque Country (0.4%). The greatest rise in new home prices occurred in Murcia, with an increase of 3.4% in the quarter. In Catalonia it was only 0.4%.
Òscar Gorgues, manager of the Chamber of Urban Property of Barcelona, ??highlighted that the moderation of the prices of new construction “has its logic, because they have skyrocketed in recent years, and are 22% higher than those reached in 2008 in the whole of Spain (16% in Catalonia)”. In his opinion, on the other hand, the prices of second-hand housing “still have an upward path” since they are 15% below the level of the “real estate boom”.
Gorgues considers that prices will remain the same in the coming months, despite the rise in rates and the deterioration of the economy, “because the supply of housing has been reduced.” This increased in recent quarters, because many families looked for a larger house and sold the old one and because many owners put up for sale flats that they had rented.
María Matos, Director of Studies and Spokesperson for Fotocasa, highlighted that the rate of increase compared to the previous quarter, of 1.9%, is still very high, due to “the great demand that arose after the pandemic, which has been increasing at a rapid pace. very quickly, without giving time for the market to absorb it”. This demand, in her opinion, has been due in large part to the fact that “citizens have rushed to close the sales before the first rate hike” and to the purchase by investors, who see real estate as a refuge from inflation. . In her opinion, “it is foreseeable that rate hikes will cool down the market” although “it is likely that until the last quarter of the year, we will not begin to see changes in the trend in house prices.”
Gorgues predicts that house prices will hold up better in the big capitals, where the demand for purchase is very high. “In Barcelona, ??for example, the supply of flats for sale has dropped by 20%: this gives a lot of room for prices to be maintained.” In addition, the rise in rents means that in a city like Barcelona the average mortgage payment (912 euros in August) is still lower than the rent. “In the capital, the buying and selling market was able to withstand a rise of three points in the Euribor without it having a major impact on sales prices,” he assured.
