Spanish house sales in July continued to slide, with the year-over-year drop widening to 10.5 percent. The month logged 48,303 transactions, the lowest figure seen since 2020. Higher borrowing costs and elevated financing charges helped push demand downward, underscoring a tougher payment environment for buyers.
On a month-to-month basis, transactions declined by 10.5 percent compared with June. Through July, the year-to-date decline reached about 5.3 percent, according to INE data.
Second-hand properties remained the dominant segment, representing roughly 83 percent of total activity. They continued to fall, down 11.2 percent versus July of the previous year, while new construction declined by 7.4 percent in the same comparison.
“Healthy” market
Despite the softer activity, prices for real estate kept rising and popular listings portals described the market as operating in a “healthy” environment where fundamentals still support value for many properties.
Idealista’s spokesperson, Francisco Iñareta, noted that July data still show a strong year-over-year decline from 2022, a peak year for activity, but stressed that the market movement appears to be normalizing rather than deteriorating into chaos. He cautioned against interpreting the figures as a disaster scenario.
Fotocasa Research Director María Matos highlighted the new-housing data, which indicates an annual drop for July. Nevertheless, she pointed out that construction activity has remained robust since the pandemic, with expectations that the year could finish with roughly half a million residential sales.
When will prices drop?
Pisos.com Research Director Ferran Font commented that the data continue to align with cooling trends anticipated for 2023, while acknowledging that the forecast remains uncertain. The real question remains when any slowdown will become clearly visible in prices.
In a podcast discussion featured in this coverage, Sandra López Letón of Today in El País explored whether this is the worst time to buy a home. The episode suggests the market logic indicates that prices should stop rising and may ease slightly, urging potential buyers to consider waiting due to high mortgage costs across fixed and variable rates. Letón notes that the current period is likely to be followed by a more stable end of year and a cautious 2024, during which price movements are expected to be modest and not subjected to broad, aggressive reductions.