At the end of April, the autonomous city of Ceuta became one of the leaders of the real estate market in Spain. A small semi-enclave of the country on the northern coast of Africa, next to Morocco. According to the latest available data for April 2022, the real estate market of Ceuta has become one of the largest in terms of housing sales in the country. The annual growth of this indicator was 48.3%.
The difference between an autonomous city and other autonomous communities in Spain is enormous. If in Ceuta the annual increase for April was 48.3%, then the nearest autonomous communities, Asturias and the Canary Islands, showed an increase of only 18.8% and 18%, respectively.
However, it should be noted that data on autonomous communities, which is logical, are collected from the entire region, while data on Ceuta are devoted to only one small city with a population of about 85,000 people. Nevertheless, the gap is still impressive, which is highlighted by the situation in another autonomous city of Spain — Melilla. This is another enclave of the country on the coast of Morocco.
In Melilla, residential real estate sales figures fell catastrophically — by 76.5% year-on-year at the end of April 2022. And in comparison with other autonomous communities in Spain, the difference is also enormous. Melilla's closest «neighbors» in terms of decline are the autonomous communities of La Rioja, Baskonia and Madrid, which showed a decline of 12.7%, 5.8% and 2.3%, respectively.
Let’s return to Ceuta. A significant increase in the number of transactions contrasts with an active decrease in the number of mortgage loan openings. According to available data, the drop in the number of initiated mortgage loans in the city is 38.9% in annual terms. The indicator is second only to the Melilla mentioned above, where the decrease was 49.1%.
However, since April, a new trend has been forming throughout Spain, which demonstrates both a large decrease in the number of mortgage loans being opened and a noticeable slowdown in the pace of home sales. This leads to the conclusion that at the national level, a sharp increase in sales, with an increase in interest rates and a reduction in the number of mortgage loans, was rather a fluctuation than an indicator of any confident market dynamics.
All this defines Ceuta rather as an exceptional case in national practice and makes us pay special attention to the local real estate market. During the first quarter of this year, 134 residential real estate transactions were concluded in the city. In the first quarter of 2021, only 72 deals were concluded. Having picked up the recovery growth at the end of COVID-19, Ceuta has been firmly maintaining it for more than a year and a half.
Nevertheless, it is worth remembering that the situation in Ceuta is very specific to Spain, since the city exists a lot due to the significant presence of civil servants who create both the local labor market and the consumer base. Their number in the city directly affects its performance in sectors such as real estate.