The start of the reduction in interest rates by the European Central Bank (ECB) is starting to be felt strongly on the real estate market. Despite the unstoppable increase in house prices, September ended with 61,887 sales transactions, or 41.5% more than just a year ago.
It is true that the data compares with September 2023, which was particularly bad for the sector in terms of volume. But this is the biggest rebound since August 2021. And that barrier of 60,000 monthly trades hadn’t been broken since 2007, at the height of the real estate bubble. In fact, you have to go back to July of that year to find a higher figure, 63,000, according to INE statistics.
“The accumulated figures already exceed those of 2023, a fact that suggests that at the end of the year they will exceed 600,000 transactions again,” anticipates Ferrán Font, director of studies at Pisos.com.
Behind these figures, according to analysts, is resilient demand from foreigners and ‘one-stop’ buyers, along with improved financing conditions - with banks adjusting interest on their mortgages downwards following the decline. of the Euribor. In fact, the September sales increase is the largest since August 2021, and there have been three consecutive months of year-over-year increases.
The improvement in September is observed in all segments. Sales of newly built homes increased by almost 55%, with 12,531 apartments sold in this category, the highest level since January 2014, and sales of second-hand homes also grew by 38.4% to 49,356 transactions , the highest level since May 2022 .
«With these data we see that, after a setback in the first half of the year, the upward trend is already clearly established. “Very active demand, together with price moderation, are pushing the market higher, especially in the large capitals,” explains Font. ”In the future, more advantageous credit conditions for the purchase of a property could contribute to increasing the purchase of the first home, a determining factor for the sector to grow further in the short and medium term”, adds the expert of the real estate portal.
In any case, sector analysts warn that the reactivation of activity, together with increasingly scarce supply, will cause prices to continue to rise, “making access to housing even more difficult for young people and families who find themselves in a more complex economic situation.
For autonomous communities and in absolute values, Andalusia was the region that achieved the highest number of sales in the ninth month of the year, with 11,344, followed by the Valencian Community (10,801), Catalonia (8,987) and Madrid (8,105) .
All communities sold more homes in September than in the same month in 2023.
The largest increases occurred in Extremadura (+79.3%), Basque Country (+67.4%), Asturias (+57.3%) and Aragon (+56%). The most moderate increases were recorded in Navarra (+18%), the Balearic Islands (+18.5%) and Murcia (+32.2%).
The properties transmitted in the real estate registers, from public deeds carried out previously, reached 195,480 last September, 27.3% more than in the same month of 2023.
The properties transferred through sales were 37.7% more than a year earlier, while those transferred through donations increased by 37.8% on an annual basis; Those transmitted by inheritance increased by 13.3%, and exchange transactions increased by 17.1%.
89.1% of September sales corresponded to urban properties, which include homes, and 10.9% to rural properties. Urban real estate sales increased 40.8% year-on-year, while rural real estate sales increased 16.9% compared to September 2023, totaling 101,379 and 12,398 transactions, respectively.
What are the primary factors contributing to the recent increase in real estate transactions in Europe?
Interview between Time.news Editor and Ferrán Font, Director of Studies at Pisos.com
Time.news Editor: Welcome, Ferrán! It’s great to have you with us. The recent statistics from the European Central Bank regarding interest rates have triggered noticeable changes in the real estate market. Can you give us a brief overview of what these changes look like?
Ferrán Font: Thank you for having me! Yes, we are seeing quite a significant shift. The European Central Bank’s reduction in interest rates is impacting the real estate market positively, leading to a remarkable increase in sales transactions. In September 2023, we recorded nearly 62,000 sales, a 41.5% increase compared to the same month last year. This is particularly noteworthy given the sluggish performance of the market just last year.
Time.news Editor: Fascinating! That’s the highest number of transactions since the real estate bubble in 2007. How does this rebound compare to historical data, and what are the key drivers behind this resurgence?
Ferrán Font: Absolutely, it is indeed significant. The last time we broke through the 60,000 barrier was back in 2007, and the recovery signals a strong trend. However, we should note that September 2022 was particularly poor, which makes the comparison an intriguing one. The primary drivers behind this uptick are resilient demand, especially from foreign buyers and quick-action ‘one-stop’ buyers, along with improved financing conditions. Banks have begun lowering mortgage interest rates as the Euribor declines, making borrowing more appealing.
Time.news Editor: Speaking of demand, it seems that both newly built and second-hand homes are witnessing increased sales. Can you elaborate on this trend?
Ferrán Font: Certainly! The statistics show a robust increase across all segments of the market. Sales of newly built homes surged by nearly 55%, with about 12,500 apartments sold—the highest since 2014. Likewise, second-hand home sales climbed by 38.4%, reaching almost 50,000 transactions, the best performance since May 2022. This trend indicates a strong product offering and a hungry market.
Time.news Editor: That’s a positive move for the sector! How sustainable do you think this growth is, especially concerning pricing and supply levels?
Ferrán Font: That is a critical question. While we are currently on an upward trend, we must consider that the reactivation of activity alongside increasingly scarce supply will likely keep pressure on prices. Although we are witnessing price moderation currently, scarcity could lead to inflation in property costs unless more listings come onto the market. Furthermore, improved lending conditions may help first-time homebuyers, which is crucial for continued sector growth.
Time.news Editor: So, in your opinion, what lies ahead for the real estate market in the short to medium term?
Ferrán Font: Looking ahead, if the favorable financing conditions persist, we could see a significant increase in first-time home purchases, which is essential for the sector’s health. If the current trends hold, we expect transaction volumes to surpass 600,000 by the end of the year. However, balancing demand with supply will be key. If supply doesn’t catch up, we could see prices rise again, which could make affordability a lingering issue for many buyers.
Time.news Editor: Thank you, Ferrán. Your insights provide a comprehensive understanding of the current real estate dynamics. It sounds like an exciting, albeit complex, time for the market.
Ferrán Font: Thank you for having me! It’s definitely a multifaceted landscape, and I appreciate the opportunity to share these insights.