The price of new housing stabilized in the first quarter, despite the fall in sales. According to the house price index (IPV) published yesterday by the INE, the prices of flats grew by 0.6% until March compared to the previous quarter, with a rise of 3% in those of houses new and 0.2% in second-hand ones. In this way, prices have reversed the fall they had in the last quarter of 2022, when they were reduced 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 yesterday by the General Council of Notaries, in April sales fell by 20.7% compared to the previous year, with 49,639 transactions . Until April, they point out, 207,527 homes have been sold in Spain, 11.6% less than during the same months last year.
According to data from notaries, the tightening of mortgage conditions is the key to the cooling of the market: in April the bank granted 21,884 mortgages, 31.9% less than in the same month of the previous year, and lend less amount in each operation (142,306 euros, 6.4% less), because the increase in rates makes the weight of the fee unbearable compared to the salary of many of the applicants.
Compared to last year, the INE points out, the price of housing has risen by 3.5%, two points less than in December. Over the last twelve months, new housing has increased by 6.0%, two tenths less than when it closed last year, while second-hand housing has risen by 3.0%, a rate year-on-year that falls by more than two points.
House prices have risen in the first quarter of 2023 in all the autonomous communities, according to the INE, with the strongest year-on-year increases in Navarre (5.8%), Cantabria and the Canary Islands. On the other hand, Extremadura (with 1.1%), Castile-La Mancha and Murcia register fewer annual increases. In Catalonia, the year-on-year increase was 3.5%, and in Madrid, 3.1%.
Compared to the previous quarter, prices rose in all communities, except in Extremadura, Castile-La Mancha and Murcia. As for second-hand housing, prices have fallen in the first quarter compared to those at the end of 2022, especially in Galicia (with a decrease of -1.2%) and Catalonia (-0.9%) .
Ferran Font, research director of Pisos.com, assured that “2023 begins with a clear trend of moderate growth, which is particularly accentuated in the less dynamic markets, where there is no strong demand”.
Patricia RodrÃguez-Lázaro, director of investments at Clikalia, pointed out that “we do not foresee a drop in house prices in the big cities”. In his opinion, “until the imbalance between supply and demand is resolved, prices will continue to rise”.
For MarÃa Matos, director of studies at Fotocasa, “there is still a latent demand that continues to keep the price up and that makes the owners reluctant to lower prices”. The expert believes that in this demand “there are many citizens waiting for a big drop in prices to occur. A situation that is difficult to occur. What we will start to see from now on are more measured increases”.
