Wednesday, 20 September 2023, 13:32
The real estate market continues to cool throughout Spain. Inflation is eroding the purchasing power of households and this is compounded by the increase in interest rates – the Euribor currently stands at 4.2%.
Property sales in Malaga province have been hit hard. In the first seven months of the year there have been 21,159 home sales and purchases, a figure that is 16.26% lower than the same period last year, when around 25,300 transactions were carried out, according to figures published on Wednesday by Spain's INE national statistics institute.
This decline in real estate activity in the province is three times higher than that being recorded both in Spain and in Andalucía. In the region, between January and July this year there have been just over 74,100 transactions, 5.9% less than in 2022. And across Spain the number of sales and purchases has been around 364,000 in the same period, which represents a decrease of 5.3% year-on-year.
In the last month for which figures are available, July, the fall in the number of sales has exceeded 23% in Malaga province; in July 2022 there were 3,622 sales but only 2,776 this year. But housing sales rates are still at high levels compared to those recorded over the last couple of decades. In July 2007, the year before the outbreak of the financial crisis, there were around 3,600 transactions. For Spain as a whole the July fall is limited to 10.5%, from almost 54,000 to 48,303. In Andalucía the drop is 8.7%, with 9,900 homes sold this July.
The data also shows that in the Malaga property market new builds are performing worse than the pre-owned housing segment. Transactions for second-hand homes fell by 22% in July, from 2,900 to 2,260, while those for new homes fell by more than 28%, from 719 to 516. In Spain, on the other hand, transactions for new homes fell by 7.4% compared to the 11% drop in transactions for second-hand homes; and in Andalucía the fall was 5.5% compared to 9%, respectively.
Francisco Iñareta, an expert with Idealista, said: "The data continues to show a significant drop compared to 2022, which was a record year. Even so, we cannot make a catastrophic reading of them, as the number of home sales and purchases is at the same level as in 2019 – at a general level, in Malaga, 2.8% below – which indicates that the market is tending to normalise and is in an environment that could be described as healthy".
The view of Ferrán Font, from pisos.com, is somewhat less complacent. He said that "among the main markets, the most relevant thing is that all of them are falling sharply: around 15% in the case of Madrid and Catalonia or 8% in Valencia and Andalucía. It remains to be seen at what point this slowdown is passed on to prices."
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