The two markets evolve with some disparity across different districts, but the city average remains stable or on the rise, making it difficult for many citizens to access housing.

Author: F. Javier Hernández

Source: AS

New turbulence is approaching the housing sector, becoming increasingly evident among real estate professionals. According to data from the XIII Real Estate Barometer, a substantial gap is emerging between the supply and demand for housing, as reported by Europa Press.

A survey among various real estate agents reveals a gradual yet relentless decline in housing demand. According to the data, 61% of real estate agencies have seen a reduction in their client base, compared to 39% that report maintaining their usual clientele for the time being.

What is Happening in the Market?

The answer is closely related to one of the major concerns of the population: the infamous Euribor and rising interest rates. Due to the current inflation in Europe, the European Central Bank (ECB) has been ‘forced’ to take severe measures affecting citizens’ wallets, translating into interest rate hikes of 3 to 4%, which significantly increases mortgage costs.

However, this issue is not unique to Spain. Sweden, one of the countries with the most robust and reliable economies in the Eurozone, is also experiencing the consequences of these measures. In fact, the Nordic country is undergoing its most significant real estate crisis since 1990, serving as a barometer for other European countries.

What Are the Expectations?

In Spain, according to reports from the Union of Real Estate Credit Institutions, this situation is expected to persist throughout the rest of the year. Based on collected data, around 70% believe that the number of homes for sale will continue to rise. These figures are further underscored by the fact that 73% of respondents think the number of buyers will decrease in the coming months, at least until the summer of 2023.

Regarding the last months of this year, projections indicate that prices will continue to fall. This, as emphasized by Brussels, is due to the impact of rising mortgage rates, including fixed-rate mortgages, compounded by the uncertainty plaguing the continent and the increasingly diminished purchasing power of the population.