Housing sales grew by 6.1% and prices by 7.2% annually, while transactions fell by 18% year-on-year in December.

Author: Mónica G. Moreno
Source: El Economista

The residential market has shown signs of moderation in recent months. However, the substantial figures achieved early in the year resulted in a 6.1% annual increase in housing sales for 2022. A total of 719,680 units were sold, the highest number in 15 years (853,568 transactions were recorded in 2007), according to the General Council of Notaries.

“In annual terms, it has been a remarkable year for the real estate sector, which has regained the vigor it had not seen since 2008, with growth in both the number of sales and mortgages granted. Prices, meanwhile, continued to rise but without reaching double-digit growth,” says Francisco Iñareta, spokesperson for Idealista.

The recovery of real estate activity and prices “remained dynamic in 2022, although at lower rates than in 2021, influenced by the unusual 2020 due to the impact of the COVID-19 health and economic crisis,” say the notaries. A notable trend was the gradual cooling of the market. Sales growth decreased from 22.8% year-on-year in the first quarter to a 10.6% decline in the fourth quarter.

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Regarding prices, growth moderation was observed, decreasing from 11% in the first quarter to 3.5% in the last quarter. Over the past year, the average price increased by 7.2%, bringing the cost per square meter to €1,615, according to notaries.

Growth in 14 Regions

Housing sales in 2022 increased in 14 autonomous communities, with the exceptions of Cantabria (-3.8%), Madrid (-1.1%), and La Rioja (-1%). Double-digit annual increases were seen in the Canary Islands (26.9%) and the Valencian Community (14%). Above the national average were increases in the Balearic Islands (7.4%), Asturias (6.6%), and Murcia (6.6%).

As for prices, all autonomous communities saw increases in 2022, except Castilla-La Mancha, where the price dropped by 1.6%. The highest increases, with double-digit rates, were in Madrid (12.2%), Murcia (11%), the Canary Islands (10.4%), and the Valencian Community (10.3%).

New mortgage loans for home purchases grew by 2.8% in 2022, reaching 355,470 transactions, with an average amount of €153,357, reflecting a 3.8% annual increase.

Change in Trend?

Housing sales have recorded year-on-year declines for the third consecutive month, according to notaries. December figures “show the cooling effect of more expensive financing and a change in market perception,” notes Idealista’s spokesperson.

In December, transactions fell by 17.8% compared to December 2021, totaling 59,730 units. Prices, averaging €1,590 per square meter, remained stable (0.5%). New mortgage loans for home purchases in Spain decreased by 22.5% year-on-year, to 25,907 transactions.

“These declines are significant as they represent the first decreases in December in over a decade, a month historically characterized by rising figures. Nonetheless, based on demand data from Idealista, it is unlikely we will see a widespread collapse in prices, transactions, or mortgage volume. Instead, we may experience a temporary cooling and a stable or slightly declining 2023 in many markets,” concludes Iñareta.

Regionally, sales decreased in all autonomous communities in December, with double-digit declines in thirteen of them. The Balearic Islands saw the largest drop, -32% to 1,216 transactions, followed by Castilla-La Mancha (-26.7%), Andalucía (-22.9%), Cantabria (-22.6%), and the Community of Madrid (-20.6%).