Price, sales or mortgages, the housing market slows down

Madrid, Sep 22 (EFE) .- The main indicators of the housing market in Spain have slowed down in recent months, both at the price level, as well as the purchase or sale of mortgages, due to political uncertainty, adaptation to the New Mortgage Law or economic slowdown.

Despite the current disparity of the data, most of the indicators related to the housing market already denote in their great majority a braking that makes experts think that the strong price increases and double-digit increases are a thing from the past in a market that is heading towards stabilization.

-What is happening with the purchase of housing?

The latest data from the General Council of Notaries show a collapse of 20.8% in July with 46,015 transactions, accentuating the fall observed in June, when they fell by 18.9%.

For its part, the College of Registrars notes a 3.1% drop in the sale of homes during the second quarter of the year at an annual rate and 2.8% compared to the first three months of 2019.

The Ministry of Development, although it gives positive data of 2.2% in the purchase of homes between January and March, does point to a moderation of its growth and even a 10% drop compared to the end of 2018.

According to the National Statistics Institute (INE), whose data comes from public deeds made months ago, transactions returned in July at positive rates, growing 3.8% after reducing 9% in June to mark the worst half since 2014 In the first seven months of the year the sale has increased 0.6%.

-And with the prices?

The average price of free housing moderated its growth to 3.1% in the second quarter of the year at an annual rate to 1,637.4 euros per square meter, which contrasts with the 4.4% increase recorded at the start of the year .

Except for the Basque Country, Castilla y León and La Rioja, where prices fell, all the autonomous communities showed much more moderate growth than in the previous quarter. This is the case in Madrid or Catalonia, where they have increased from 8.3 and 5.9% to 5.2 and 4.3%, respectively. In addition, at quarterly rates, prices fell in eight communities, including Madrid (0.1%).

Notaries also reflect a 1% price drop in July, while the INE cools the increase to 2.7% in the first half compared to the 5.7% recorded last year and Tinsa moderates the increase in August to 2 , 8% from 4.5% the previous month.

-And the mortgages?

According to the notaries, the July data show a 23.2% drop in mortgage loans for the purchase of a home with an amount that remains at 149,176 euros. The INE moderates the decrease to 2.5% in June, which meant a slowdown for the market, not only because of the fall in operations, but also because of the decrease in borrowed capital, which had been on the rise for more than two years.

-And in the land market?

The sale of urban land plummeted 37.5% in the second quarter of the year at an interannual rate and 23% at an inter-monthly rate. The area was also reduced by 42%, as was the value, according to Promotion.

– What factors are behind?

From Idealista, the desalination that the real estate market has suffered due to the entry into force of the Mortgage Law in June and the political uncertainty, which has forced many investors to "stay on hold" while clarifying the panorama, are highlighted.

Appraisal Society (ST) indicates the normalization of the housing market and recognizes that the number of mortgages and transactions that correspond to the current cycle are not being seen.

Access to the first home remains the fundamental challenge of Spain, in which people between 25 and 35 years of age have practically impossible to access a home owned in large capitals, they add from the appraiser.

Fotocasa believes that the data confirm that the market is moderating with respect to what was seen in previous years due to the economic slowdown and, in the case of prices, suggests that this behavior will intensify as the year progresses due to the national macroeconomic context and international

Pisos.com also highlights the delay in operations that has led to the new Mortgage Law, political instability – marked by new elections in November -, the evolution of the Euribor and a "brexit" very close in the calendar.