Residential buying and selling activity weakened further, following a steady slide driven by higher financing costs and rising interest rates. In September, a 23.7 percent annual drop marked the largest decline since mid-2020, reflecting a sustained series of rate increases that have tightened borrowing conditions and cooled demand.
New data from the National Statistics Institute shows 44,086 housing transactions for the month, the lowest level since April and the calmest September in three years. The figure underscores a market that has cooled as financing costs rise and affordability tightens for buyers.
On a month-to-month basis, August-to-September activity fell by 10.5 percent, amplifying the year-to-date decline to 8.5 percent. The slow pace continues a trend of weakening sentiment and constrained supply affecting both buyers and sellers.
Second-hand home sales lead the drop, down 24.5 percent
In September, sales of used homes remained the most active segment, accounting for more than 81 percent of total transactions, yet declined to 35,908 deals, down 24.5 percent from September of the previous year. This pattern highlights the pressure on the resale market as buyers recalibrate budgets under higher financing costs.
New home purchases also fell, dropping 19.7 percent year over year to 8,178 transactions. The data shows negative momentum in 10 of the last 13 months, illustrating a broad slowdown across both segments.
Overall, these were the steepest declines observed since July 2020, signaling a challenging environment for both buyers and sellers. Despite the annual dip, the proportion of transactions involving existing homes remained above 80 percent, while new homes represented a smaller share of activity.
In the overall year-to-date picture, total housing transactions decreased by 9.5 percent, with new housing activity down 4 percent, underscoring a broad-based slowdown across the market. Free housing transactions reached 40,768 in September, making up more than 92 percent of total activity but showing a year-over-year decrease of 23.5 percent. Protected housing transactions totaled 3,318, down 25.3 percent from the prior year.
Used home transactions, which dominate the market, fell 24.5 percent, while new-home sales dropped 19.7 percent, reflecting varying pressures across market segments.
September saw a 10.5 percent monthly decrease
With the annual decline in place, total purchases and sales dropped by 10.5 percent on a quarterly basis. Among the components, the biggest month-over-month drop occurred in new houses at 13.2 percent, while second-hand houses fell by 9.8 percent.
The market’s descent began to slow briefly in December previously, with a rise in January of 6.6 percent. The same pattern re-emerged in February, and the subsequent months saw a continuation of declines, including a 5.7 percent correction in March, an 8.1 percent drop in April, a 6.4 percent decrease in May, and a similar pace into June. July marked a 10.5 percent retreat, August deepened to 14.4 percent, and September approached a 24 percent decline, revealing the breadth of the cooling across the market.
All regions feel the impact, Canary Islands hardest
September brought declines across all communities, with the Canary Islands posting the steepest fall at over 40 percent. Extremadura and Aragon also faced substantial declines, at 32.2 percent and 31.1 percent respectively. Catalonia, Balearic Islands, Andalusia, the Basque Country, and Madrid all logged meaningful year-over-year declines as well, illustrating a nationwide cooling in activity.
Against this backdrop, land registry data recorded 153,247 property registrations in September, a 13.2 percent decrease. For the year, 82,778 property purchases and sales were registered, down 20.1 percent. Stock exchanges declined by 17 percent, donations by 16.2 percent, and inheritances fell by 3.8 percent. Other operations, including land consolidations and mortgage foreclosures, totaled 29,825, about 1.1 percent lower than the prior period.