We come from a couple of years of real estate eruption. Housing intensified after the Covid pandemic, when the demand that had stagnated during confinement gained momentum until it could, in practice, carry out its intentions.
The argument that led them to sell their home to buy another was to “adapt to new needs” related to outdoor spaces and teleworking, among others.
Foreign demand also recovered and soon surpassed pre-pandemic numbers; They were, for the most part, “acquisitions of second homes for vacation reasons” and “teleworkers from other countries,” notes a recent report from the Bank of Spain on “The mismatch between housing supply and demand.”
This post-pandemic, seasonal vitality of the home buying and selling market has been exhausted as the needs of demand subside and, above all, due to the demands of financing conditions during 2023 and the resulting overexertion of buyers.
Despite the decrease in sales, Housfy estimates that 500,000 homes will be sold by the end of 2023 in Spain. In 2022, there were close to 650,000 transactions, a record in 15 years that consolidates a very resilient real estate market.
“Current buyers are, in general, middle- and high-income households, middle-aged, with pre-existing assets,” describes the Bank of Spain. Most of them are those who “do not finance a very high proportion of the cost of purchasing a home with credit.”
These agents are not enough to maintain the market at a level of dynamism similar to that of the previous two years. For this reason, the specialist foresees a rebound in sales when there is a “stabilization of interest rates on mortgage loans.” Real stabilization is not expected until well into 2024.
The price of apartments in Spain will continue to rise, mainly due to “the favorable financial situation of the different agents in this market,” says the BdE.
However, things are different in different regions of the country, proportional to the mismatch between supply and demand. In communities where demand is fierce and supply scarce, price developments show greater dynamism.
Some of the regions that have already exceeded their historical highs of 2007 are the Balearic Islands, Madrid, the Canary Islands and Andalusia. They have not done so yet, but Catalonia, the Valencian Community and Euskadi are approaching quietly.
