If we summarize the opinion and recommendations of experts of the European real estate market about the current situation, then they can be expressed in the following phrase: "Hurry up if you are selling a house. Take your time if you are buying. Stay if you have taken out a loan".
It is already obvious that the current tightening of monetary policy, actively implemented in the eurozone, will lead to a cooling of demand in the real estate market of the EU member states. A decrease in the inflow of investment funds to markets such as Spain is predicted. Consumer demand will also fall due to the lack of cheap borrowed funds.
Sellers today are interested in accelerating sales and rising housing prices — their desire to sell at the peak is more than justified. However, buyers should think again. According to all indicators, the Spanish market is waiting for cooling already in 2023 and, according to some estimates, sales will decrease by more than 10% in annual terms.
Many give in to panic, believing that the rise in real estate prices will persist for years and this forces them to make rash purchases. Since the European Central Bank (ECB) started hastily raising interest rates in 2022, the Euribor indicator has been growing non-stop. August ended with an indicator of 1.7%, and in October it already exceeded 2%. This is the highest annual increase in lending rates since 2000.
The General Council of the Association of Real Estate Agents of Spain (COAPI) agrees with European colleagues: "Today is a good time to sell, but a good time to buy will come only in a few months". Maria Matos, research director and spokeswoman for the Fotocasa real estate portal, notes: "Sellers will probably try to take advantage of the last wave of demand before it subsides. We can see favorable conditions for buyers before the end of the year".
Another warning for buyers should be the uncertainty and concerns in the Spanish real estate market, which are associated with the recession of the global economy. This generally makes the market behave chaotically and unpredictably, which once again underlines the need for extremely deliberate actions in the current situation.
When the hype in the Spanish housing market passes, no longer supported by cheap loans, demand will slow down. According to available estimates, the growth of Euribor can increase average mortgage interest payments by about 1,200 euros per year. At the same time, inflation, especially in the energy sector and consumer goods segment, will reduce the amount of available funds at the disposal of households — by about 3-4 thousand euros per year.
Maria Matos adds that the main indicators of the market that should be monitored are raw demand and the scale of the shortage of housing supply for sale. When demand falls, and the balance in the market begins to level off, the situation with the "paralysis" of the construction sector improves, the country's housing stock will be replenished with a large number of expensive and affordable properties, then a tendency to decrease prices will become noticeable. It is at this point that you should start buying.