HE ad The upcoming elections on July 23 are coinciding with a slowdown in real estate activity right at the start of summer, a period that is already the most challenging for the sector. It appears that dual payments this year could help prevent projects from stalling during moments of rising interest rates, tighter bank lending, and ongoing inflation. The latest figures from the National Institute of Statistics (INE) have echoed the sentiment expressed by real estate firms, and recent data from registrars released this Tuesday deepen the picture with new details. Registrars reported a pronounced drop in mortgage activity and a more moderate decline in home sales in April. Specifically, residential registrations fell 8.7% in April year over year. Mortgage activity also slowed sharply, shrinking 19.3% year over year, marking five consecutive monthly declines after steady growth since March 2020.
From 92,648 operations in April 2022, registrations dropped to 84,195 in April this year, a fall of about 8,500 operations. Home sales also declined, though more moderately, to 42,139 from 46,163 registrations in April 2022, a drop of over 4,000 transactions.
Mortgage brokerages in the real estate sector also report that borrowers face hurdles in obtaining loans. The downturn is accompanied by early mortgage cancellations as households seek to limit the impact of higher interest rates.
Regionally, total sales in April show a year-over-year decline across most areas, with notable drops in Ceuta (-50.0%), the Basque Country (-28.0%), La Rioja (-20.4%), the Balearic Islands (-17.1%), Aragon (-13.6%), Galicia (-12.6%), Catalonia (-12.4%), and Extremadura (-11.8%). There were a few exceptions, with Melilla showing a substantial rise (265.2%) and Valencia and Cantabria each up by 3.5%. In terms of mortgage origination, Extremadura (-31.1%), the Balearic Islands (-28.8%), La Rioja (-28.6%), Navarra and Catalonia (-28.0%), and Galicia (-27.6%) all saw declines, while Ceuta (+140.9%), Melilla (+51.7%), Valencia (+7.0%), and Aragon (+6.2%) experienced increases.
price question
On pricing, valuation firm Tinsa reports that the average price for new and resale homes in Spain rose by 0.3% from April to May, with a year-over-year increase of 4.8%. This pace is more moderate than the prior month and remains above 2019 levels. Cristina Arias, director of Tinsa’s Research Service, notes that overall prices stay stable as financing costs rise and inflation erodes purchasing power, yet household solvency remains intact. Consequently, buying and selling activity is gradually moderating while staying above pre-pandemic benchmarks. Arias also points out regional divergence, with some areas showing stronger demand from buyers who often require less external financing to purchase a second home.
Fotocasa’s release on Tuesday paints a somewhat different picture, indicating higher price gains in several markets. Catalonia saw a 6.4% year-over-year rise in May, with average prices reaching 2,744 euros per square meter. The Fotocasa Real Estate Index showed 17 autonomous communities posting higher annual prices in May. Double-digit increases dominated in the Balearic Islands (22.7%), Navarra (20.2%), Canary Islands (17.9%), Valencian Community (12.0%), La Rioja (10.5%), and Andalusia (10.2%). Other notable rises occurred in the Murcia region (9.3%), Catalonia (6.4%), Cantabria (5.4%), Aragon (5.3%), Extremadura (4.8%), Castilla-La Mancha (4.0%), Madrid (7.0%), Galicia (3.4%), Castilla y León (3.0%), the Basque Country (2.7%), and Asturias (2.3%).
The most expensive second-hand homes in Spain were found in the Balearic Islands and Madrid, at 3,679 and 3,446 euros per square meter respectively. The Basque Country recorded 2,968 euros/m2, followed by Catalonia at 2,744 euros/m2 and the Canary Islands at 2,123 euros/m2. Navarra, Andalusia, Cantabria, and Aragon also posted elevated prices per square meter, with Galicia, the Valencian Community, Asturias, La Rioja, Castilla-La Mancha, and the Region of Murcia trailing in the lower ranges. Barcelona topped the provincial list at 3,051 euros/m2, with Girona, Tarragona, and Lleida following. In year-over-year terms, prices rose across the board in May, with Girona’s city center leading gains at 7.0%, Lleida 5.2%, Tarragona 4.2%, and Barcelona 2.3%, while Barcelona’s provincial capital remained the most expensive at 4,415 euros/m2, followed by Girona and Tarragona in the higher echelons.
districts of Barcelona
Across nine of ten Barcelona regions, second-hand housing prices continued to climb in May. Notable gains included Nou Barris at 7.9%, Gràcia at 7.6%, Sant Andreu at 6.6%, Sarrià–Sant Gervasi at 5.5%, and Sants–Montjuïc at 4.8%. In the districts of Horta-Guinardó and Sant Martí, prices rose by 2.9% and 1.6% respectively, while Eixample registered a modest 2.0% rise and Ciutat Vella a 1.1%. Les Corts was the only district with a slight price dip (-0.1%). In May’s price per square meter, the priciest districts were Sarrià–Sant Gervasi at 6,073 euros, Eixample at 5,475 euros, and Les Corts at 5,288 euros. Nou Barris offered the most affordable options at 2,721 euros per square meter, with Sant Andreu at 3,238 euros per square meter.