Sales are in full swing in the Spanish real estate market. In the first five months from January to May, by the summer of 2021, more than 50,000 residential units were sold in the country. This was a record that the sector had not observed since early 2008.
Earlier, the primary housing market was the leader in sales. Today, the main activity has shifted to the secondary market. This occurred as a result of the lack of new properties for sale and the enormous growth in housing demand.
According to the National Statistics Institute (INE), a little more than 482,000 second-hand housing properties have been sold in the past 12 months.
Official statistics have been kept since 2007, the period of peak growth of the "bubble" in the real estate sector. This is the base year and a reference point for the analysis. According to this metric, the number of transactions almost reached 449,000 on the secondary market in the base year.
The all-time record for monthly growth was set in March of the current year. Almost 48,000 transactions were conducted in the secondary property sector. It was the best March in 15 years.
The beginning of 2007 and 2022 can be compared in terms of the total number of transactions per quarter. More than 230,000 housing units were sold in Spain in the first quarter of 2007. Almost 165,600 residential units were sold in the same quarter of 2022. But there is no big difference in transactions on the secondary market: 136,356 sales were made in the first quarter of 2007, and 133,156 second-hand homes were sold in the same period of 2022.
This means that if earlier new housing sales were about half of the total selling transactions on the market, their share now does not even reach 20%. Today, in some provinces, 9 out of every 10 houses for sale are second-hand properties.
Gonzalo Bernardos, a professor of Economics at the University of Barcelona (UB) and directs a master's degree in Real Estate Consultancy, Management and Promotion at this educational institution, offers a precise diagnosis for the modern market: “At the beginning of the century, the Achilles heel for the Spanish real estate sector was the abundance of new residential units. While everything is different nowadays, the final result, ironically, may be similar. The only difference is that then prices rose because of excess loans, now prices grow because of a supply shortage.
The strong aspiration of many Spanish people to acquire a new home connects those times to the current situation. According to the study "Radiografía del Mercado de la Casa" by Fotocasa, the company and real estate portal, half of the existing demand is for personal use purchases.
The share of this demand increased from 40% to 50% in just a year. In contrast, demand for rental dwellings fell from 50% to 38% (note: the remaining share is related to respondents searching for residential property in both options). In response to this situation, Maria Matos, Spokeswoman at Fotocasa, emphasizes that the market has completely changed and now the desire to acquire a home is the dominant force in the market.
There is another consequence of this change. "We have found a serious problem."Maria Matos reports: There is a growing imbalance between supply and demand. It becomes more and more pronounced."
The problem is that the rather anticipated distortion leads not only to a concomitant price increase but also to a general overheating of the market. Gonzalo Bernardos writes about this in more detail: "It has become so easy to sell properties that sellers in small towns and settlements do not even seek the help of relevant agencies. Housing units are already sold out in less than a month".
According to Gonzalo Bernardos, in Spain, more than 600,000 second-hand properties could be sold by the end of the year. This is an unprecedented figure over the past two decades.