The real estate portal pisos.com foresees moderation in the real estate market and some cooling “but no collapse”
There is no risk of a bubble in the Spanish real estate market, according to the internet portal pisos.com. Ferran Font, the study director and spokesperson, assures that in the face of 2023 they see “a lot of price containment”, although not falling. Pisos.com forecasts point to an average increase of just 1% in house prices next year, although that will not be the same in all markets. It is precisely the cities with more active demand, such as Madrid and Barcelona, that make it impossible to lower the average rate. Pisos.com thus expects the market to move between a 1% decline and a 3% growth in 2023. And that ends after this year with an estimated price increase of 4.5%. Figures that contrast with the 7.2% or 6.6% increases recorded in 2017 and 2018.
The increase in prices in the purchase and sale of housing is therefore “moderate” and amounts to 2%. However, Font explained at a press conference that all forecasts are based on an unknown, namely the impact that the new housing law may have and the application or not by the autonomous communities of the rent restriction. Font stressed that the price restriction “has not worked in Catalonia” as its evolution has been the same as in Madrid, but what it has done is narrow the market because the owners felt less safe, as happened in Berlin and Paris. According to him, the restriction is not the solution to the difficulty of accessing rental housing and is calling for public-private partnerships and freeing up more properties that are now vacant so that they can be rented out, “ceasing to demonize the big homeowners. He also called for a stable, long-term housing policy with political consensus.
In terms of home sales, more than 620,000 will be made this year, representing a 10% increase from 2021. Font stressed that these numbers have not been seen for a decade. For 2023, the real estate portal pisos.com forecasts an 11% decline, which would keep home sales around 551,000, due to uncertainty, as many have brought forward their purchase decision to the first half of 2022 to anticipate the rise in the interest rates. In any case, transactions seem to be consolidating at nearly half a million, a far cry from the 800,000 that occurred during the real estate boom. Andalusia, Catalonia, Madrid and the Valencian Community are the communities where there is the most activity, although the Community of Madrid has recorded three consecutive quarters of waterfalls.
Fewer mortgage applications will be due to the decline in transactions and as more and more people buy without taking out a mortgage, a clear reflection of the relevance of buying as an investment and the change in the ability to pay of those who have access to the purchase. Pisos.com estimates point to a 17% drop in mortgages next year to 358,637, meaning only 65% of purchases will be made with a mortgage loan.
The new work has not only recovered and barely reaches 20% of transactions, while previously it represented 50%. The increase in material costs and also in credits to the initiators, in turn, lead to an increase in the costs of new apartments.
In conclusion, according to Font, “we are moving into a situation of cooling, but not collapse. The outlook for 2023 is good, although there are many uncertainties.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
