Home sales fell 9.7% in 2023 after two years of increases and the mortgage firm sank 17.8%

The real estate market boom after the pandemic cooled in 2023. According to data published this Thursday by the National Institute of Statistics (INE), home sales decreased by 9.7% last year compared to the record figures of 2022.. The mortgage firm also plummeted 17.8%, in a context marked by the rate increases undertaken by the European Central Bank (ECB).. In fact, the average interest rate closed the year at its highest level since 2015. Even so, despite the tightening of access to financing, in 2023 more mortgages were signed and more apartments were sold than in 2019.

Last year, a total of 586,913 home sales and purchases were registered, a figure that was far from reaching the 650,265 transactions recorded in the previous year.. This 9.7% drop in home purchases occurred after 2022 saw an unprecedented sales volume since the real estate bubble.. Operations then recorded their second highest growth in 15 years, with an increase of 14.8%, only surpassed by the 34.8% increase in 2021 after the pandemic.

In this way, the decline in 2023 breaks two years of consecutive increases in the real estate market. This is the second largest drop in eleven years, only ahead of the 16.9% collapse in 2020, when just over 420,000 sales and purchases were made.. However, the sales volume in 2023 exceeds the 505,467 operations in 2019 by 16.1%. “In absolute figures, 2023 has been a great year from the point of view of home purchases,” says Ferran Font, director of Estudio des apartments.com, who recognizes the “significant drop” compared to the previous year.. “2023 is closing with great numbers, but much more moderate than those of a record 2022, so we are in a more sustainable scenario,” he values.

Only in the month of December 2023, 36,698 homes were purchased, 15.6% less than in the same period of the previous year. Specifically, 6,878 new and 29,820 second-hand apartments were purchased, 11.9% and 16.4% less respectively than in the last month of 2022. Throughout the year, the sale and purchase of used homes decreased by 10.8 %, totaling 476,019 operations, while transactions carried out on new apartments fell by 4.8%, to 110,894.

With the declines at the end of the year, home sales continued to decline for eleven months, after having already shown the first signs of slowdown at the end of 2022. The deepest year-on-year drop was recorded in the month of September, in which 23.7% fewer sales and purchases were recorded than in the previous year.. In monthly terms, operations decreased by 21.7% in the last month of 2023 compared to the 46,888 homes sold in November.

In parallel, the mortgage firm also sank in 2023, although the average amount rose 2% to 142,074 euros. Last year, a total of 381,560 loans were granted for the purchase of housing, 17.8% less than in 2022. In this way, the barrier of 400,000 annual loans surpassed in 2021 and 2022 was not crossed, when the number of firms recorded its highest volume since 2011 after growing by 11% compared to the previous year.. The fall of 2023 broke the upward trend in the granting of mortgages since 2014, only interrupted in 2020 by the stoppage of the pandemic. Even so, the volume of signatures registered last year exceeded the 361,291 loans in 2019.

The granting of loans for home purchases showed the first symptoms of slowdown already in the final stretch of 2022, ending the year with a year-on-year drop of 8.9% in December. After a slight recovery in January, the mortgage firm chained eleven consecutive declines in 2023 and closed the last month of the year with a collapse of 17% – 24,927 loans were granted -, still carrying the impact of the tightening of monetary policy in the eurozone by the ECB. “The working days of last December, the maintenance of interest rates by the banks and the high housing prices are some of the keys that have affected the low figures of mortgage firms,” explains Simone Colombelli. , mortgage director at iAhorro.

The escalation of official rates peaked at the end of last year, reaching a level of 4.5% at which the monetary authority has remained immobile in its last three meetings. According to INE data, the average rate signed on home mortgages returned in December to the 3.32% reached in October, its highest level since 2015 and more than six tenths above the 2.65% at which the year began. anus. Specifically, the average rate in December was 3.07% for variable rate mortgages and 3.54% for fixed mortgages, which continue to be the preferred option for buyers, although they are losing strength.. Throughout 2023, loans linked to the Euribor constituted 40% of mortgages signed, compared to the 29% they represented in 2022.

“Looking to 2024, the situation will continue to be marked by the evolution of the Euribor, as well as by the uncertainty generated by both the consequences of the different international armed conflicts and the application of the new housing law,” predicts the director of apartment studies. com. Although the president of the ECB, Christine Lagarde, has pointed out that the first relief in official interest rates will not arrive until the summer, the Euribor – the reference index for the majority of variable rate mortgages – has already abandoned its upward trend at the end of last year, closing December below 4% for the first time in six months. If this trend continues, the improvement in access to financing conditions could once again stimulate home buying and selling throughout the year.