Spanish House Sales Fall For The Third Consecutive Month Down 8.1% In April
Spain News
Published: 12 June 2023 16:54 CET
The real estate market in Spain has experienced its third consecutive month of decline, indicating a slowdown in sales. According to recent statistics published by the National Institute of Statistics (INE), home sales decreased by 8.12% in April. This decline in sales is attributed to the rise in interest rates and increased financing costs, although sales figures remain higher than pre-pandemic levels.
In April 2023, a total of 43,311 house sales were recorded in Spain, marking an 8.12% decrease compared to the same month in 2022. This is the lowest number of homes sold since February 2021 when there were 43,251 sales. However, it is important to note that the number of sales is still higher than that of April 2019, which saw 41,199 transactions. María Matos, the director of studies at Fotocasa, explained that sales are being moderated by the rise in interest rates but are still higher than in 2019.
With the decline in April, the real estate market's slowdown is becoming more pronounced after experiencing year-on-year declines of 5.71% and 6.61% in February and March, respectively. Ferran Font, the director of studies at the real estate portal pisos.com, stated that the trend of moderation is the current reality of the sector. He added that the records in 2023 are significantly lower than those of the previous year, as predicted by all forecasts.
Compared to the previous year, the decline in home sales in April is the most significant since December, with a 10.17% decrease. This was the first time since February 2021 that the real estate market experienced negative rates. So far in 2023, home sales have decreased by 3.4% compared to the first quarter of 2022.
Font predicted that the expected remarkable activity in 2023 will continue, albeit at lower levels than the previous year. The figures will depend on factors such as inflation, the rate policy of the European Central Bank (ECB), potential increases in the Euribor (Euro Interbank Offered Rate), and the uncertainties surrounding the implementation of the new Housing Law. Matos agreed, emphasising that the purchase and sale process typically takes 60 to 90 days, from the signing of the deposit to the mortgage approval.
April 2023 marks the largest year-on-year decline in the fourth month of the year since 2012. It is only surpassed by the collapse caused by the pandemic in 2020 and matched by the figures of 2017. The monthly decline is even more significant. Compared to the 55,778 flats sold in March, the volume of sales in April represents a monthly decrease of 22.35%, higher than the 20.32% decline observed in 2022. This monthly drop is the largest recorded in a fourth month of the year since 2011, excluding 2020.
The decline in April home sales can be attributed to a decrease in both second-hand property transactions, which fell by 9% compared to the previous year, and new home sales, which decreased by 4.2%. Although the decline in second-hand property sales is the largest in terms of year-on-year comparisons since January 2021, it still remains the majority option. In April, a total of 35,057 second-hand homes were sold, compared to 8,254 new homes. Furthermore, 68.2% of sales were made between individuals, and 92% of the homes sold were free properties, while 8% were protected properties.
In terms of regional distribution, twelve autonomous communities in Spain reported fewer home sales in April 2023 compared to the same month in 2022. The most significant decreases were observed in the Basque Country, the Balearic Islands, La Rioja, and Galicia, with declines of -23.4%, -19.6%, -18.6%, and -15.2% respectively. On the other hand, the Canary Islands, the Valencian Community, Extremadura, Asturias, and Murcia experienced year-on-year increases ranging from 11.6% to 1.2%. In terms of absolute values, Andalusia (8,878), Catalonia (6,947), the Valencian Community (6,742), and Madrid (5,613) had the highest number of home sales in April. However, the highest ratios per 100,000 inhabitants were observed in the Valencian Community (166), Cantabria (135), and Andalusia (131).
Source
https://ine.es/daco/daco42/etdp/etdp0423.pdf
https://www.20minutos.es/noticia/5136831/0/la-compraventa-de-viviendas-cae-un-8-1-en-abril-y-acumula-su-tercer-mes-consecutivo-a-la-baja/
