Bank of Spain expects house prices to grow between 0% and 6% in the coming quarters

This slowdown from their rise housing prices The growth that started in the second quarter of last year will continue in the medium term. This is the prediction of the Bank of Spain, whose economists find it logical to think that these prices will increase between 2015-2019. 0% and 6% in subsequent quarters, is affected by a demand that will be suppressed by the rapid increase in interest rates to fight inflation. A “soft landing” should allow it to be corrected. “exaggerate a little” according to its director they have been observing since 2020 financial stability organization, Ángel Estrada.

Housing prices fell sharply after the housing bubble burst. 37% drop Between 2007-2013 at the beginning of 2014 ascension pathStarting to soften its rhythm in 2019 and slowed down with the advent of sharply corona virus. But after only 0.9% more expensive in the first quarter of 2021, the economy reopened and the consequent drainage of dam demand During the quarantine, the increase in prices accelerated again. 8.5% peak Between January and March of last year.

Since then a “Substantial slowdown”: Increase between October and December 5.5% The Central Bank of Spain, on the other hand, estimates that it will continue in the same line in the first quarter of 2023. buying and selling your houses and new mortgages slowed “significantly” in the second half of last year. Actually, more than pricesdeveloping more moderately because of the “persistence of a certain time” “poor supply”. “This brake on activity in the housing market, loss of purchasing power your houses, high uncertainty and progressive hardening financing terms mortgage loan“, drew attention to the Bank of Spain in its latest financial stability report.

private vulnerability

In the said report, the subject institution Pablo Hernandez de Cos warned about the relationship between house prices and house prices. household income “in the levels relatively high and keeps rising trend Since 2014″. In another recent document, its annual report, “a private vulnerability under the conditions access to housinghardening in both owned and leased residences in recent years”. have families they went down From 83% in 2011 to 74% in 2020For those under 35, the decline increased from 69% to 36%.

Although this problem is also linked to factors such as the labor market, award criteria mortgage and offer Falling prices could be good news, because this situation “small” overvaluation observed in the residence is moderated until it is maintained. positive but close to zero in the next quarters. “At the end of 2022, the price imbalance indicators in the housing market remained positive although close. balance level, mainly due to increased prices your home and above all your home rent reduction available from households. The tightening in financing conditions is expected to alleviate these signs of imbalance in the coming quarters,” the stability report said.

moderate exaggeration

The supervisor thus calculates an an average of 5.23% overvaluation at the end of last year minimum 3.71% and maximum 7.92%. Estimates include a range because they four valuation methods It takes into account factors such as household income, the level of interest rates, the relationship between credit and GDP, or past price trends. According to his calculations, rate increases transferred to the economy (each increase takes up to 24 months to take full effect), “a more moderation in the real estate marketThat, in turn, could remove existing signs of imbalance.” In other words, he expects demand to moderate because credit will be more expensive, which should lower prices.

HE European Central Bank (ECB)for his part, he observes his symptoms overvaluation in Spain from the first quarter of the year 2017Although it is far from around 40% of the bubble peak in 2007 and is significantly lower than the European average. between 1% and 13% at the end of September compared to the average eurozone from among 1% and 27%. The data differs from that of the Bank of Spain as it uses it. four different valuation methodswhether prices are in line with their average values ​​since 1996, with the main factors affecting them (such as interest rates, GDP or current housing stock) and the evolution of families’ incomes (and estimated) to be appropriate).

Source: Informacion


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