The real estate market lives the best semester in 15 years due to the pull of the second hand

The real estate market lives the best semester in 15 years due to the pull of the second hand

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Almost 331,000 homes have changed hands in Spain in the first half of 2022. This is an unknown figure for many years, 15 exactly, because not so many houses have been sold since 2007. In that year, some 342,000 homes were sold in the second half, when a certain cooling began to be noticed in a sector that was going crazy (between January and June 2007 more than 432,000 homes were transacted, and in 2006 the activity was possibly greater although the Institute National Statistics Office did not collect the data). But unlike then, when cranes colonized cities and construction represented more than 10% of GDP, now there is hardly any new construction. Less than one in five purchases between January and June corresponded to brand new houses. The conclusion is obvious: the second hand is driving the sector like never before.

The sales of used homes between January and June of this year, according to data provided by the INE this Friday, were close to 270,000. Never, not even in 2007, had something like this been experienced. The best semester to date totaled 256,000 operations, which means that Spain is in this segment of activity above the records of the years of the real estate bubble at the beginning of the century. And, as then, with rising prices so far.

The trend began to be seen at the end of 2021 and has continued (and accentuated) during the first part of this year. If in July of last year Spain managed to exceed 50,000 home sales (a milestone that had not been reached since 2008), in recent months the mark has been around 60,000 monthly operations. May exceeded that figure and June fell back somewhat, but it was not far behind: 58,010 homes sold, of which 48,188 were second-hand (the third highest record in the statistical series, only surpassed by January 2007 and May this year ).

The radiography of the operations of last June also leaves other clues that reflect well the moment in which the real estate market finds itself. If more than eight out of every 10 houses that are sold are second-hand, even more (nine out of 10) are free homes. Seen from the opposite angle, of the more than 58,000 sales, only 4,309 corresponded to real estate that had some type of official protection. The market is growing above all, therefore, in free second-hand housing. And the pull of purchases for investment is felt in the type of transferor: operations in which the buyer is a legal person (that is, a company) grow faster than those in which a natural person buys. Although the latter does not imply that individuals continue to dominate the market very widely: they added almost 54,000 of the 58,000 monthly sales.

generalized increase

In the accumulated from January to June, home sales grew by 23.1%, according to the INE. In other words, almost a quarter more was sold in the first half than in the same months of 2021. But seven autonomous communities exceeded that rate, with the Balearic Islands (54.6%), La Rioja (34.9%) and the Valencian Community (34.7%) in the lead. On the contrary, Navarra (7.2%), Madrid (9.7%) and the Basque Country (11.2%) experienced the lowest half-year growth. In the autonomous cities, the behavior could not have been more disparate: if in Ceuta operations shot up 73.7% year-on-year, in Melilla they fell by 11.2%. If only the month of June is observed, more homes were sold in all territories than in the same month of 2021, with the exception of Madrid, where sales fell by 6.3%.

The analyzes largely agree. “2022 is being much more intense and with better data than last year,” describes María Matos, Director of Studies for the Fotocasa portal. “If this intense rate of trading continued like this”, adds the expert, “we could close well above 600,000 trading and it would be the best year since 2007″. However, it is not clear that the fuel that has fueled the real estate market in recent times will remain as powerful in the coming months. In another note sent to the media, Francisco Iñarreta, spokesman for Idealista, believes that the figures released this Friday respond “to the strength that demand has shown due to historically low mortgages, the desire to change homes and the record savings of a lot of families”.

The first of these conditions has changed radically. In July, the European Central Bank raised official interest rates for the first time in six years and did so with the biggest increase in 22 years. “The consequent tightening of mortgage conditions by banking entities is going to mean that the second half of the year will not present such high activity and we will surely stop seeing historical figures,” predicts Matos. He also alludes to “runaway inflation”, because “little by little it will begin to make a dent in the pockets of Spanish households”. In other words, two circumstances (low interest rates and accumulated savings) of the three mentioned by Iñarreta are disappearing or on the way to disappearing. For this reason, the Idealista spokesperson also points out that “in the coming months we will see a stabilization of the data, or perhaps a drop.”

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