AURIGA Real Estate present at the forum HOUSING PRICES.
AURIGA Real Estate attends the debate forum on the real estate market organized by the data portal PRECIOS DE VIVIENDA in Madrid on March 10, 2023. In the discussion forum, some data were extracted, conclusions on which some forecasts were made for 2023 on the residential real estate market for 2023.
- Sharp drop in sales
In general, CaixaBank Research estimates that sales will fall this year by closer to 25%, that the price of housing will adjust moderately and that the mortgage effort rate will worsen. It also predicts a slight decline in construction costs, more increases in rents of rental housing and three new increases in interest rates by the European Central Bank (ECB), which has room to increase an additional point.
According to Judit Montoriol Garriga, senior economist at CaixaBank Research, in 2023 and 2024 sales will move closer to the historical average than to last year's levels.
Specifically, it has estimated at 480.00 0 the number of home sales in Spain in 2023 and at just over 500,000 the volume in 2024. For this year, the forecast is that the volume of transactionswill be close to 26% (in 2022, 649,494 units were registered in the records , according to the INE), although it will remain above the historical average (450,000 units).
- Moderate adjustment of the price of housing.
In the case of the domestic market, "the price begins to show signs of moderation" and believes that "the adjustment will be limited. In Spain, no imbalances have accumulated in the 2014-2022 expansionary cycle that suggest a sharp fall in the sector".
- Rise in mortgage effort.
The theoretical mortgage effort of families (that is, the percentage of income that a household must allocate to repay the loan) will rise strongly in the coming months. It currently moves at 33.6%, slightly above the level recommended by experts, although it could reach 38% in the first half of the year, levels not seen since the end of 2011, according to the historical series of the Bank of Spain. Even so, By the end of 2024 the effort ratio could be around 34.8% (more than one point above the current level).
- Higher rental incomes.
Despite the fact that the price is already at maximums, CaixaBank Research predicts an average rebound of 2.8% this year. In the case of new rentals, considering as such those that are up to six months old, the expected increase is much higher and could approach 7.7%.
- Three new rate hikes.
Interest rates have not yet peaked in the euro area, as inflation remains very high, including core inflation.
- Fall in construction costs.
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