2023-04-14 11:08:35
BBVA Research forecasts that housing transactions will fall by around 30% in 2023given the lower economic growth, both national and foreign, the rise in interest rates and the reduction in savings accumulated during the pandemic.
Although the adjustment will be important, mainly in used housing, it is expected that sales will be slightly above 500,000, a level similar to the annual average between 2015-2019according to the ‘Real Estate Observatory’ for the first quarter of this year, published by BBVA Research.
The report warns that relatively high uncertainty, a higher-than-expected rise in interest rates and the maintenance of inflation at high rates will continue to negatively affect household income, which is gradually draining accumulated savings.
Due, the demand for housing will decrease in the coming quarterswith the reduction in the second home segment and demand from foreigners being particularly relevant, influenced by the slowdown in growth in the main European countries.
For their part, BBVA Research experts have anticipated that the signing of new housing visas could be reduced by around 9% in 2023. Among the factors that will limit the advance of the offer are the increase in the cost of financing, the increase in wages, the lack of qualified labor, the still high price of some inputs, the deterioration in demand expectations, as well as as regulatory uncertainty. In any case, the shortage of new housing should make the impact limited.
The price will remain practically constant
It is expected, for its part, that the price will remain practically constant in 2023 (-0.2%), although in real terms the correction would be 3.9%. The lack of demand will have a negative impact on the evolution of housing prices. However, high inflation and the relative scarcity of supply will partly offset this negative impact.
The sector could begin to show a new recovery in 2024 with moderate increases in demand, supply and prices, after this year’s adjustment and the recovery of the economy, in a context of reduced supply. Thus, house prices are expected to grow around 2.5%, sales around 5% and visas around 6%.
All this with the permission of the main risks facing the sector: additional monetary tightening as a result of high inflation, shortages of skilled labor and developable land, as well as increased uncertainty around economic policy.
The forecasts of the BBVA research service are in line with those it manages CaixaBank Research, which also predicts a decline in housing transactions close to 25%. It also foresees that the rental price will continue to rise in the coming months, given the low supply and high demand for rental flats, and that the mortgage effort will increase; that is, what households must allocate to pay the mortgage on their income. However, it also foresees an improvement for 2024.
Consultants and developers are also confident that, during the next financial year, with more economic certainty and more moderate inflation, the market will pick up: home sales will grow again and that the operations of the large investors that have been paralyzed in recent years will return. months. They insist that the fundamentals of the real estate sector are good, although it faces challenges such as the development of more homes or the need to reinforce legal certainty.
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