House sales cooled in July according to the latest data from the National Institute of Statistics, INE. A total of 48,303 transactions were closed in July, marking a 10.5% drop from the same month in 2022, when 53,720 deals were recorded. While this was the eighth straight month of slower activity, the declines remained modest. Across 2023, 364,086 trades were finalized, which is 5.3% below the level seen in 2022.
In July, around 83 percent of sales involved existing homes, while new constructions accounted for the remaining portion. The data also show shifts in property types compared with the previous year, with new properties down by about 7 percent and used homes down by roughly 11 percent. In the month, roughly 92.7 percent of transfers were on the open market, with about 7.3 percent classified as protected or subsidized housing.
Looking at the first half of the year, housing market activity cooled by about 4.5 percent, with total transactions reaching approximately 315,000 compared with 330,000 in the first half of 2022. In June, a near-record month, 53,999 deals were completed versus 58,010 in June of the prior year, a decline of close to 7 percent. These figures reflect a market navigating higher financing costs and a slower pace of buyer activity, even as households continue to seek suitable housing.
Prices continue to rise
Despite the softer sales volume, price dynamics moved in the opposite direction. The INE reports that housing prices rose by about 3.6 percent in the second quarter. Within that period, new construction showed strong gains, with prices up 7.7 percent year over year from April to June. This marked the largest quarterly increase for new builds since the second quarter of 2022. In contrast, prices for second-hand properties rose more modestly, up about 2.9 percent in the same quarter, the slowest growth rate for two years.
The second quarter of 2023 stood out as a period of rising prices alongside increasing financing costs and higher interest rates. Analysts note that higher borrowing costs have a direct impact on housing affordability, influencing the mix of property types purchased and the pace of market activity. The observed price resilience in new construction suggests continued demand for new homes among buyers who associate value with modern features, energy efficiency, and favorable warranties, even as the overall market moderates.