Second-hand homes save real estate from the rate hike

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Buying and selling activity rose 11.4% in the best October since 2007, although signs of a slowdown are already visible

The slowdown in housing market growth registered in September gave way to a much more active month of October with the closing of 51,615 transactions, the highest figure in October since 2007, implying an 11.4% year-on-year increase.

The data is once again strengthening on a year-over-year basis compared to the limited 6% growth recorded in September. Although there are still signs of a slowdown compared to the increases of around 30% in the first months of the year. In addition, according to INE statistics, the number of operations is 10% lower than in September.

Nevertheless, it cannot be ignored that the sector is experiencing 20 consecutive months of increases, despite the impact that the interest rate hikes by the European Central Bank (ECB) are having on this market.

Behind this resistance is the surge in used home sales, which is on track to close a historic year with a 15.6% increase in October with 42,771 units, compared to the 5.4% decline of new-build homes (8,844 transactions). ), which has already accrued negative annualized interest rates in three of the last four months.

Up to and including October, used homes grew by 20.7% year on year, with new construction falling to 5.4%.

Analysts from Idealista.com recall that the INE’s increase in turnover contrasts with the general decline that notaries already observed in October. As they point out, this may be due to the time lag between the two statistics, as the Institute relies on that of the clerks, where operations of up to two previous months are recorded.

As Francisco Iñareta, spokesperson for Idealista, explains, “the delay of this public data makes the statistics hardly reflect the impact of the increase in borrowing costs in the market and therefore shows a scenario prior to these increases”.

While he is confident the year will end with more than 600,000 homes sold, experts believe the November and December statistics will show the depth of the ECB’s measures on real estate. In fact, there are already some communities experiencing a decline in sales. This is the case for Navarre (-8.8%), La Rioja (-3.7%), Galicia (-1.7%) and Castilla la Mancha (-0.1%).

Source: La Verdad

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