The purchase of a second home keeps the real estate market in Asturias afloat

2023-07-23 04:15:00

Asturias is the only autonomous community in Spain in which the purchase and sale of housing has not stopped growing so far this year, despite the rise in interest rates and the consequent increase in mortgage prices. This is reflected in the data on transfers of property rights published by the National Institute of Statistics (INE), which indicate that operations in the Principality have increased in every month until May in the interannual rate. The figures contrast with those of Spain as a whole, which has accumulated four consecutive months of declines in transactions compared to the same period in 2022. Professionals in the Asturian real estate sector point to three fundamental factors: the purchase of second homes by people who do not usually reside in the region, the lower growth in prices compared to other territories in the country and the optimal financing conditions offered by rural banks and credit cooperatives.

The purchase of a second home keeps the real estate market in Asturias afloat

“Asturias is selling more compared to its historical average, we are in a moment of overselling,” says César Nozal, co-director of the La Playa agency and member of the board of directors of the Association of Real Estate Agents of Asturias (Asocias). Nozal points out that, for example, in the first quarter of the year, 937 houses were sold in Gijón, 17% more than in the last three months of 2022. “The absorption capacity of the city – that is, the number of homes sold out of the total number of available homes – was 748 properties, which is a healthy average,” explains Nozal, who adds that “anything selling above that figure will reveal growth.”

Although Gijón, Oviedo and Avilés were, in that order, the places with the most activity in the first quarter, the upturns shown by locations such as Langreo (with 172 transactions, 15% more than in the previous quarter and an increase of 16% compared to the same period in 2022) or Mieres, where there were 152 operations, almost 25% more in the quarterly rate and 38% more than a year ago, stand out.

Nozal points out that “there are more and more operations carried out by buyers from outside Asturias and who acquire a second residence.” He qualifies that “what is out of price is not being sold”, but that “the prices of the Asturian market are still 25% below their historical maximums of 2008 [cuando se llegaron a rebasar los 1.800 euros por metro cuadrado]while other communities such as Madrid or the Balearic Islands are breaking records”.

The Idealista real estate portal indicates that the average price per square meter in Asturias is 1,352 euros (1.4% more than a year ago). “It is true that prices have risen, but not excessively,” says Nozal. In the capital Madrid, for example, the square meter is at 4,015 euros on average, an interannual increase of 5%, according to Idealista.

Antonio Vega, president of the Association of Real Estate Agents of Asturias, believes that “many second home operations that had been left in the air when the pandemic broke out are being resumed”, since “the prices that existed then, before the covid, were exorbitant”. In his opinion, the dynamism shown by the sector in the region “is an exceptional circumstance” and the containment of prices is largely due to the fact that “there is much more demand than supply, and when there is not enough supply, prices cannot be raised, it would not make sense”. All in all, Vega believes that the market “will tend to stabilize.”

Another striking recent data is the signature of home mortgages. For example, in May 697 loans were initialed in Asturias, exactly the same as a year before. This contrasted with the year-on-year drop of 24% in the country as a whole, precisely in a month in which the average mortgage interest rate stood at 3.15%, the highest in six years.

Katia Domingo, president of the Union of Real Estate Agents of Asturias, recently told this newspaper that, in her opinion, this better regional performance is due to the fact that “in Asturias there are some rural savings banks that still offer mortgages for 100% of the property value, which allows access to people who do not have enough savings to finance themselves at 80% or even 90%.