By September 2022, apartment sales in Aragon continued to remain at an all-time high. Moreover, the indicators already exceed the peak indicators of the boom times in the real estate market in the late 00s. The price growth continues, although it gradually decreases to a more moderate pace.
Experts point out that the hotbeds of extremely active growth are the last «tails» of the ending cycle of market recovery after COVID-19. On the contrary, negative factors are strengthening. These include various non-economic factors, including the conflict in Ukraine, macroeconomic factors, including the growth of the Euribor rate and crises, including the one related to energy.
Luis Fabra, professor of the Department of Real Estate Market Studies at the University of Zaragoza explains: «The slowdown in the market is obviously happening. The processes in the economy are already largely working on the basis of other rates. However, it is worth noting that the slowdown does not look as catastrophic as some experts believed. Nevertheless, the last impulses of the real estate market recovery that began two years ago have already disappeared».
Fabra adds that the transition from negative lending rates to actively growing and high positive indicators took place in just 10 months. A huge number of people had to rethink their plans for the purchase of new real estate in the shortest possible time. Most often we are talking about postponing purchases for an indefinite future, when prices and rates will be more attractive. This, of course, is already affecting and will continue to affect the market performance in a bad way.
Market experts, however, believe that the real estate market in Spain, and in particular Aragon, maintain amazing stability under the blows of external factors, which have already been mentioned above. For example, Rafael Espes, a technical specialist at Tinsa in Zaragoza, points out that the statistics do not indicate any future catastrophic decline in the local real estate market. Special confidence is given by the constantly incoming information about the construction of new projects. If construction is underway, it means there are still buyers on the market and there are a lot of them.
Espes does not expect sharp price declines in the market in the near future, at least in the first half of 2023. He points out that the current price level is largely supported by a shortage of supply in the face of enormous demand. Solving the deficit will take years, so at least this factor will play into the hands of investors who are afraid of falling prices. At the same time, Rafael Espes points out that it is no longer worth waiting for the «ideal time» to buy or sell real estate. The market has become extremely dynamic for a long time and the situation is changing from month to month. Instead of waiting, it is worth investing your time and resources in studying the current market.
Tinsa expects a slowdown in sales growth in the coming months. The company relies on data from its own index «IMIE General and Large Markets», which showed an increase in prices in October 2022 by 9.2% year-on-year. The index has been declining since then.
Experts agree that the growth of mortgage lending rates will continue and it will harm the market. Already today, this is one of the key factors why investors and ordinary buyers refuse to enter the Spanish market (approx. and European in general). Too much risk with uncertain profits, while stretched for decades ahead.