You can often hear that summer in Spain can be a good time for many things, but definitely not for the real estate market. It is a time of heat, holidays and vacations. It seems that the entire market freezes, focusing its attention on several regions and major market segments.
According to José María Basañez, President of Tecnitasa real estate appraisal agency, [compared to other seasons], there are fewer residential real estate sales on the market in summer, as those who have houses either rent them out or enjoy them themselves, and buyers' attention is focused on short-term stays in the coastal regions and not big cities and central regions.
María Matos, Director of Research at Fotocasa, also expresses the same opinion: "Many Spaniards are trying to complete all real estate transactions before the holidays or postpone them until autumn."
Usually, the peak of home sales, even on the coast, falls between February and April. According to Basañez: "As a rule, prices for identical properties in summer are higher in spring and fall in autumn. Summer is the time to earn money for rent or vacation."
However, there are other points of view, examples of one of them are Armando Lasauca and Ramon Riera. The first is the CEO of aProperties, and the second is the vice-president of the FIABCI Real Estate Federation. Both point out that August is one of the best months for sales, confirming this point of view with data on minor price changes in summer compared to other periods of the year.
The latter is also confirmed by data on the dynamics of the Spanish market by year. Before the COVID-19 pandemic, in January 2018 and 2019, home sales were consistently higher than in the summer. So, at the beginning of both years, apartment sales were around 48,000. In the summer of 2018, sales barely reached 45,000, and in the summer of 2019 – only 36,000. However, in 2022, the situation became the opposite. In January of this year, the market set a record of 52,684 real estate transactions, but the summer period surpassed this result, exceeding the figure of 58,000.
Gonzalo Bernardos, Professor of Economics at the University of Barcelona, states: "According to the data received, all the houses that entered the market in the summer were sold out in the first days of sales. Especially the indicators are good on the coast: good price growth, high turnover." According to Bernardos, no matter how the ECB raises interest rates, they remain low from the historical perspective, and there are enough households with a large amount of savings in the country to buy a home. Many savings were accumulated recently, during the pandemic, and have not yet been spent.
According to the professor, changes in the labor market also contribute to housing sales. Focusing on remote employment or a mixed employment system motivates people to purchase new housing that will satisfy not only vital needs, but also provide a comfortable workplace.
However, there is another factor to take into account when analyzing the situation in the residential real estate market in Spain.
Coastal housing and the impact of the Russian-Ukrainian conflict
The current international situation and the developing global economic crisis have become a problem for the market, partly motivated, partly accelerated by the conflict between Russia and Ukraine in February 2022.
As soon as the Spanish market strengthened after the lifting of quarantine restrictions with the end of the acute phase of the pandemic, new problems arose, including not only inflation and interest rates, but also a shortage of building materials, the displacement of numerous Russian and Ukrainian real estate buyers from the market.
Because of this, as well as the approaching winter and rising energy prices, the Spanish real estate market and the economy as a whole are in an uncertain state. On the one hand, there are enough reasons for a drop in sales on the market not only until the end of 2022, but also in 2023. On the other hand, elite and expensive housing is expected to be positive, as it is traditionally less vulnerable to economic shocks due to the purchasing base of extremely wealthy people.
However, the market has begun to show signs of slowing down and cooling. The coming months will show what the future holds for Spain.