Opposite forces are affecting the Spanish housing market. The repeated increase in interest rates led to the fact that in January the Euribor rate exceeded 3.3%. Combined with inflation of 5.8% for the same month, the Euribor rate creates a high probability of a decline in demand for housing in European markets, including Spain. The falling purchasing power of the population and the level of income do not go well with expensive mortgages. It is worth noting that the banks themselves are tightening the conditions for issuing loans to consumers.
Specialists of the real estate and financial instruments comparator HelpMyCash indicate: "We believe Euribor could fluctuate between 3.75% and 4% during the first quarter". They warn that the evolution of mortgage interest rates depends solely on decisions made by the European Central Bank (ECB). It is necessary to closely monitor the specific decisions of the ECB in the coming months.
Also, real estate markets today face a significant shortage of offers. For example, in Barcelona, according to the report of the College of Architects of Catalonia, the number of new construction projects approved in 2022 was 48% less than in 2021 and 38% less than in 2019. Part of the demand has been transferred to the secondary housing market, but this does not solve the fundamental problem.
HelpMyCash experts report that many homeowners are postponing the sale of their real estate, as they do not want to enter the market, which is in a state of uncertainty and under the possibility of price correction in the coming months. Many prefer to make a safe bet on renting out housing, rather than selling.
Anna Villanueva, Managing Head of Tyco in Spain (approx. the company operates in the segment of direct purchase of real estate), agrees with the experts from HelpMyCash. She points out that there are still enough homeowners who are still eager to sell their property. Some as soon as possible. But the growing uncertainty about the state of prices does have an impact on the willingness of sellers to enter the market. There is a possibility that the surge in supply will occur mainly due to panic sales in anticipation of a correction.
At the same time, interest from foreign buyers is certainly growing. This is reported, for example, by Roman Travertino, commercial director of the real estate agency J'achete in Barcelona (the agency specializes in French-speaking buyers), assures that in January they had a record number of applications from buyers.