The Spanish market records the highest home sales since the ‘credit crunch’ of 2008

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A trend that seems to be maintained as long as their prices rise in line with inflation, experts explain. Of course, with the uncertainty of how the new Housing Law will affect the market, which includes price control mechanisms, penalties for empty flats, rent reductions for large owners in new contracts and tax surcharges for second homes. Among other measures. Several listed companies in the sector offer their vision of the Spanish real estate business.

The more than 53,000 purchase and sale transactions formalized last September have been understood in the market consensus not only as the take-off of the sector after the pandemic, but as the first signs, still not intense or alarming, of boiling, which are even beyond a normalization of this productive segment. The year-on-year increase of 40.6% is not an illustrative jump. Obviously, this is an escalation from one of the lowest points of a period of reduced inactivity, after the social confinements of spring 2020 and the timid resumption of the economy. But the comparison also has as a reference one of the first and few months of resuscitation, immediately before the third wave of infections. With second-hand sales as the undisputed engine of the current reactivation, with 42,477 compared to 11,000 of new construction, which is close to the levels of more than 60,000 operations that used to be registered in the most buoyant months of the real estate boom of the first years of the millennium. A propensity to acquire homes after the long waiting period of the Covid-19 that is conjugated, also due to the increase in the capacity to save during the health crisis and due to the permanence of interest rates close to zero.

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In the midst of a climate, in Europe, of rising prices. In the euro area, as Eurostat has just confirmed, during the second quarter of the year they rose by 6.8%, with high demand tensions and supply rigidity, focused on investments that are still low frequency and the pressure of the persistent shortage of labor and the collapse in the supply of construction materials. With the Nordics and Central Europeans as flagships and with Spain in the list of countries with the engines running to undertake a rather vertical takeoff. But cwith a handicap in sight: the growing divergence in house prices. This is anticipated by Judit Montoriol-Garriga, lead economist in the CaixaBank research service, for whom the price of housing “has grown considerably in recent years and the first symptoms of overvaluation are beginning to appear in cities such as Madrid and Barcelona. and certain tourist destinations ”.

For Montoriol-Garriga, “this reality coexists with a very different one in less urban areas, where the recovery of the real estate sector has come later and is being slower.” Consequently, “lhe regional divergences on prices and housing accessibility are accentuating ”in Spain, which is why he speaks of“ a recovery at different speeds, between leading, advanced, follower and take-off regions ”. With a growing price gap between autonomous communities and between cities.

After the sharp fall in house prices between 2008 and 2014 (of 30.7% in nominal terms and 37.2% in real terms), an expansive cycle of high heterogeneity in terms of geographical development began in 2015, which It has led to a rebound in house prices in the last five years. Nevertheless, it is still 22% below the peak reached before the credit crunch, he explains. Despite this, the price differential that was already completely evident before the Great Pandemic has worsened.. In 2019, buying a home in Barcelona or in the capital of Spain costs more than twice the national average, while in 2014 it was 1.6 times more expensive, he recalls. Even so, the CaixaBank economist assures that “housing, at present, is not overvalued in the national market, although in Barcelona, ​​Madrid or the Balearic Islands its prices are already above its equilibrium value”.

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The price of housing recovers at different speeds
Index (100 = Q1 2014)

Source: CaixaBank Research, based on data from the Ministry of Development.

Gap in the domestic accessibility ratio with respect to its long-term trend in the CC. AA.

Source: CaixaBank Research, based on data from the Ministry of Public Works, INE and internal data.

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