Low interest rates during the first half of the year and subsequent rises in the second half of the year boosted sales and purchases in 2022. The year is expected to close with more than 600,000 transactions expected nationwide, figures that have not been recorded since before the financial crisis of 2008.
“The mortgage market is the consequence of the real estate market. If houses are sold, there will be financing; and if houses are sold less, this indicator will fall accordingly,” says the president of the Spanish Mortgage Association, Santos González. Mortgages are expected to fall by 10%, and this foreseeable slowdown in home sales and purchases will have a direct impact on mortgages.
It is estimated that inflation will continue to rise and that the Spanish economy will slow its growth rate to around 1.5%. Many expert economists say that the real estate sector will hold up in 2023 despite the rise in interest rates. It is believed that sales transactions will decrease slightly, prices will remain high, the mortgage market will suffer and mixed mortgages will increase in demand.
According to data from the National Statistics Institute (INE), more than 560,000 transactions were recorded in 2021, the highest figure since 2007. Meanwhile, in 2022, the number of transactions has already exceeded 600,000.
“The real estate market has a lot of inertia and has been very accelerated since 2021, when excellent figures were recorded. In 2022 they are expected to be even better, so stopping this trend from one day to the next is going to be very complicated,” notes the deputy general manager of the Real Estate Credit Union (UCI), José Manuel Fernández.
“The truth is that prices are starting from levels well above those of 2021. According to the latest data from the Ministry of Transport, Mobility and Urban Agenda, the average appraised value of free housing registered a year-on-year growth of 4.7% from June to September. However, compared to the previous quarter, for the first time since the beginning of the pandemic there has been a drop in the value per square meter, from 1,740.7 euros between April and June to 1,740 euros. And, although this is an almost testimonial figure, it is the first drop recorded in more than two years”, as published by RTVE in an article on the current situation on January 25. Thus, it also reflects that “The Euribor will not exceed 4% and that a large part of its evolution will depend on the monetary policy decisions taken by the European Central Bank (ECB) in the coming months. For the time being, and although the risks generated by the energy markets and the war in Ukraine have receded, inflation is still far from the target set by the supervisor (2%), so it is foreseeable that interest rates will continue to rise to contain the rise in prices”.