·         English:Date: 11 Dec 2024

The Spanish real estate market has recorded impressive figures in recent months. During September and October, 131,305 home sales were made, numbers not seen since 2007, just before the outbreak of the financial crisis. Although these figures evoke memories of the real estate bubble, the current context is radically different, dispelling fears of a new crisis. However, the dizzying pace at which properties are being sold raises key questions: what is driving this demand? Who are the buyers? And what role does financing play in this phenomenon?
A turnaround in the residential market
After two years of slowdown driven by rising interest rates and rising mortgage rates, the residential market has experienced a significant rebound. According to Ferran Font, Director of Studies at Pisos.com, “after a start to the year marked by setbacks, the market has taken off and will close 2024 with figures close to those of 2022, a record year.” This change responds to a more active demand, favored by the stabilization of interest rates, especially in large cities. Looking ahead, more favorable credit conditions are expected to boost the acquisition of first homes, giving a new boost to the sector.
Who is behind the purchases?
The report by the General Council of Notaries reveals that, since 2018, individuals represent the majority of real estate transactions, while companies barely participate in 10% of the operations. Regarding the profile of buyers, 52% are men, with predominant ages between 35 and 54 years. Also noteworthy is the increase in purchases by those over 55 years of age, while purchases by those under 34 years of age remain limited.
An interesting aspect is the growing trend to pay for homes without resorting to mortgages. In 2023, 60% of homes were purchased in cash, a figure that reflects a considerable level of savings among the population. In addition, mortgage debt has been significantly reduced, from 660 billion euros in 2008 to 513 billion today.
Are we facing a new real estate bubble?
Although the figures are reminiscent of those recorded before the 2007 crisis, experts rule out the existence of a bubble in the current market. Unlike that period, housing supply is now limited, with barely 100,000 new units per year, well below the creation of households. In addition, banks have tightened the conditions for granting loans, and the level of household debt is at historic lows.
Strong demand, driven by both domestic and foreign buyers, and fear of a sustained increase in prices, have caused available homes to be sold in a matter of days. This has generated tensions in the market, especially in large capitals, where prices are following an upward trajectory.
Short and medium-term outlook
With a falling Euribor and a growing Spanish economy, the outlook for the real estate market is optimistic. According to Francisco Iñareta, spokesperson for Idealista, “the reactivation of demand after the reduction in the cost of financing and the fear of a rise in prices will continue to drive sales.” However, limited supply continues to be a challenge, putting upward pressure on prices in the short term.
The General Council of the COAPI of Spain highlights that this boom in transactions is a good sign for the economy, since the purchase and sale of homes is a key indicator of the country’s financial health. Everything indicates that the positive trend will continue in the coming months, supported by a favorable economic outlook and stable demand both domestic and foreign.
This new real estate boom is not just a record figure; it is a reflection of the dynamism and transformation of the sector in an economic context very different from that of 2007.