In Spain, the volume of housing transactions reached almost 675,000 transactions in 2021. It is a 38.3% increase in comparison with the previous year and the highest absolute rate since 2007. Similarly, the province of Soria saw a growth of 27.4%, with more than 1,300 transactions, while in Castile y León the figure reached 36.2% (almost 32,800 transactions recorded in 2021). In both cases, these numbers have not been reached since 2009 and 2008, respectively.
However, it is important to note that a significant part of these transactions was the result of pent-up demand during the worst moments of the pandemic. In this regard, over the last quarter of 2021, data shows that the growth rate of buying and selling transactions is slowing down despite the fact that Afi estimates that there are still about 20,000 transactions to be conducted in Spain (this is a small volume, it is barely two-thirds of the average volume of houses sold in a month).
In 2021, in Spain, home prices showed a positive average dynamics with an increase of 2.1% in annual terms (1,658 euros per sq.m. on average), except for Soria and Castile and León. In Soria, prices fell by -3.4% (897 euros per sq.m.), and in Castile and León, the average home price per sq. m. decreased (-0.4% or 1,023 euros per sq.m.). However, it dropped less than in the province.
It should be noted that Soria has been experiencing a decline in housing prices since the third quarter of 2016. So, the influence of the pandemic on prices peaked in the second quarter of 2020. But this impact was lower than the price drop in previous quarters (-4.5% in 2020 compared to -4.6% in 2019 in annual terms). Thus, starting from the second quarter of 2020, the decline rate is gradually slowing down in the province.
Data for the first quarter of 2022 confirms this pattern. It reflects a drop of 0.9% in home prices (at an average price of 908 euros per sq.m.) in Soria. Meanwhile, in the first quarter of 2022,, housing prices were very positive and rose by 2.9% in Castile and León and by 6.7% in the whole country (with average prices of 1,045 euros per sq. m. in Castile and León and 1,734 euros per sq.m. in the country).
As a result, a slowdown in new housing construction (new building permits) should be expected. The rising cost of various building materials, and the difficulty in filling vacancies in this sector, which can lead to higher labour costs, strengthen these expectations for housing supply in the short run.