EVOLUTION OF THE MORTGAGE MARKET IN SPAIN AND FUTURE FORECASTS
In recent years, the real estate market in Spain has experienced very significant growth in terms of prices: it has already risen for 37 quarters. Since 2015, the price per square meter of housing has been 46%, while inflation has risen, in the same period, by 22.77%.
2022 has not been a year that breaks the trend within this series: the increase in the price per square meter has been, according to the INE, 7.4% last year. 67,640 million euros in mortgages were granted. In total, 649,494 homes were sold in Spain, of which only 18% were new construction. The Spanish market shows a preponderance of operations in the second-hand market - 80% of total operations - and a shortage of new construction, especially in large cities.
For 2023 and subsequent years, a contraction of the mortgage market is expected, basically due to the following points:
Rise in the Euribor, which increases the cost of mortgages.
Reduction in the growth of the economy, or even recession, which is reflected in salaries.
Decrease in savings accumulated during COVID.
Harder and stricter conditions from banks to grant a mortgage. Historically, the rise in the Euribor and the reduction in economic growth have increased the number of mortgage defaults, and banks are trying to avoid this growth by being more selective in granting mortgages to avoid, as far as possible, reproducing the increase in defaults. .
The data available for 2023 - those for the first two quarters - are quite revealing: in the first quarter, prices continued to rise, specifically +0.8%, although the interannual variation fell to +6.3% . This represents a drop compared to 7.4% in 2022. In the second quarter, the increase was 0.6%, and the year-on-year variation was 4.8%. Simply put, prices continue to rise, but less and less. Regarding mortgages granted in the first two quarters of this year, we have a drop of 21.92% in the number of mortgages granted, and a 22.49% drop in the capital granted in mortgages.
It is striking that, while the number of mortgages granted falls significantly, and the capital also falls, the price of housing does not stop rising, even if at a slower rate. According to statistics, the number of buyers who pay for homes in cash is increasing greatly, and those who need a lower percentage of the value of the property to make the purchase.
The forecast for the coming years is not positive for the real estate market, although there may be exceptions in very touristy areas or some provincial capitals where there is little available land.
The H&B team.