Where are flat prices in Zaragoza heading after another fall in sales?

Where are flat prices in Zaragoza heading after another fall in sales?

The return to study in the property sector comes after a year in which statistics showed a change in trend, with almost all indicators showing a fall rather than a rise. Sales began to decline, and with them the number of mortgages requested by buyers. At the same time, cash purchases have become increasingly weighted towards avoiding Euribor-marked interest rate rises. Where it is not yet clear whether there has been a change of trend is in the dynamics of prices, which continue to rise.

"August is a month of stalemate," explains Fernando Baena, president of the Association of Real Estate Agents of Aragon. "Theoretically, these months are less favourable," he admits, referring to forecasts for the rest of the year, but there are exceptions, such as last year, when there was "a lot of pre-buying because of the forecast of interest rate rises".

At the time, there was a pool of savings created during the pandemic and if a mortgage was required, it was sought to be underwritten before Euribor rose further, which has taken families from negative rates to the current 4.07 per cent over the past year. This upswing in sales has led to a near-record first quarter of 2023, with 16,485 sales in the year - a boom times figure - but down 4.45% for the year, according to the latest report from the Department of Property Market at the University of Zaragoza and Ibercaja, whose second quarter data for Aragon will be presented this week.

"Last year was particularly good, with 12.8 sales per 1,000 inhabitants per year, when the normal figure in a healthy market is 10," Baena gives an example that explains one of the reasons for the current drop. The estate agent doesn't talk about sales, but expects "stable prices" and believes "they will remain so for several quarters".

Prices rose by 5.7% in Aragon in August (5.8% in Zaragoza province, 4.7% in Huesca and 4% in Teruel), according to data collected by property portal Idealista from transactions with them. Another portal, Fotocasa, reported a year-on-year increase of 7.9% in Spain and 4.7% in Aragon, totalling €1,705 per square metre.

According to the latest figures from the Association of Registrars in Spain, residential sales transactions in the second quarter totalled 151,983 transactions, down 7.3% from twelve months earlier. The report shows a year-on-year increase in flat prices by 3.1% to €1,979 per square metre. Mortgages fell 14.5 per cent, with 93,557 mortgages signed nationwide.

"The price will remain stable and even rise in new buildings due to a lack of supply and higher construction costs," Baena said.

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