Author: Helena Ortega

Source: Mundo Deportivo

A turbulent phase in the housing market is approaching in our country. According to experts, the real estate sector is about to undergo a significant cyclical change.

The specialized housing portal Idealista has noted that, until now, the market has managed to withstand inflation and the uncertainty caused by the Russian invasion of Ukraine. However, the market has become congested, and as a result, it is expected to experience a shift between the remainder of this year and the first quarter of 2023, meaning within the next six months at most.

The real estate network Donpiso anticipates “a year-end and a 2023 marked by adjustments in the real estate sector, resulting in a decrease in transactions and a downward adjustment of prices to fit the new situation.”

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Furthermore, Donpiso highlights: “The slower growth of the Spanish economy, burdened by falling consumption, financial difficulties faced by businesses, public debt, and an uncertain job market will lead to declines in consumer confidence. This will negatively impact decisions related to high-involvement products such as housing or vehicles.”

In addition to these factors, the increase in interest rates imposed by the European Central Bank (ECB) is contributing to the situation. Donpiso’s analysis points out: “A widespread adjustment in the sector is approaching, with price moderation and a decrease in transaction volumes. The effort of families to cover mortgage payments has already reached 35-40% of their net monthly income due to rising rates, meaning a portion of the demand will be excluded from the market.”

For these reasons, the average time to sell a property will increase. Additionally, Donpiso estimates that the average price increase for housing in 2022 will be around 5%, which is lower than previous years, and forecasts “a clear downward trend in 2023, though within moderate ranges.” It is expected that prices will rise on average between 3% and 5% this year, with next year’s increases projected to be between 1.5% and 2.5%. Nonetheless, the European Central Bank (ECB) believes that housing prices will fall by an average of 9% in the eurozone over the next two years, and investment is expected to decrease by around 15%.