Home sales grew by 5.8% in February and recorded its first increase after a year of declines

Change of pace in the real estate market. After a year of consecutive falls, home sales broke the trend and rose 5.8% in February compared to the same month in 2023. It did so driven both by the surge in new homes, which set record figures in a decade, and by the recovery of second-hand homes.. According to data released this Monday by the National Institute of Statistics (INE), in the second month of 2024 a total of 52,796 apartments were sold, the second best figure for a month of February in more than fifteen years.

This rebound in housing sales represents the first positive rate recorded since January of last year, when the closing of pending operations in 2022 caused acquisitions to rise by 4.9%, a mirage that did not prevent the subsequent collapse of sales.. While waiting for growth to be maintained in the coming months, the bearish streak could have come to an end after the collapse moderated already at the start of 2024, recording a drop of just 2.1% in January -the smallest of the twelve chains, well below the 15.4% drop with which 2023 said goodbye in December- and the second best home sales data for the month of January since 2009.

With respect to the 55,496 transactions closed in the first month of the year, in February the sales volume decreased by 2.9%, a much smaller drop than the 10.1% recorded last year at the same time.. In fact, the 52,796 homes sold in February represent the second best data for a second month of the year since 2009, only surpassed by the 53,739 sales in 2022. The decline in 2023 that began around that time occurred after a year of record figures, although trading volumes remained very important.. The most pronounced decreases came in the second half of the year, in which 50,000 monthly sales were not reached.

“It is the first time in thirteen months that sales have shown positive levels, which demonstrates the great interest that exists in the market for home purchases and that demand continues at maximum levels despite the monetary policy of high interest rates. “explains María Matos, Director of Studies at Fotocasa. Experts were already warning of a soon change in the evolution of the market. “We are getting closer to a change in trend,” predicted Ferran Font, Director of Studies at the real estate portal piso.com, based on January data.. “In general, 2023 was a year that showed a downward trend and in the first two months of 2024 this dynamic was completely broken,” Matos now confirms.

By communities, the February increase in sales was noted in thirteen regions. Specifically, Navarra was the one that registered the greatest increase. Operations grew in the regional community by 50.6% compared to the previous year's data. Galicia and Murcia followed, with increases of 38.4% and 19.5% respectively. Madrid's increase was the most moderate – just 0.4% – although it remained the fourth community with the most transactions (6,323), behind Andalusia (9,606), the Valencian Community (9,154) and Catalonia ( 8,518). The Canary Islands, Balearic Islands, Andalusia and Castilla y León were the only four regions in which the volume of operations was reduced – between 12% and 1% – compared to the levels of a year ago.

The second hand is recovered

The growth in sales in February was due to both the push of the new construction market and the recovery of second hand. Of the 52,796 homes purchased in the second month of 2024, almost eight out of every ten were used homes. The acquisition of second-hand apartments grew by 2.2% compared to February of last year, which marked its first increase after twelve months of consecutive falls. In total, 41,268 operations of this type were registered, compared to the 11,528 new homes transmitted.

However, the purchase of brand new homes gained weight slightly in the market as a whole, after growing by 20.8% compared to the 9,541 operations registered in February 2023.. This increase placed the volume of new homes transferred at its highest level in ten years, since the beginning of 2014. “This typology is also experiencing a sweet moment, because the interest in buying brand new homes continues to be strong,” states the Director of Studies at Fotocasa, who warns that if the dynamic continues and demand remains latent “we may find ourselves with a serious problem of price increases” due to the effect of inflation on the cost of materials, production and logistics, but also due to the shortage of supply.

In addition, the number of free home purchases and sales grew by 6.7% to 49,033 operations. This type of property represented 92.9% of the total number of homes transferred under this formula in February, compared to the 7.1% represented by protected homes, which fell 4.7% to 3,763 transactions, the lowest figure in a month of February since 2015.

The data known so far for 2024 suggest that the real estate market is recovering its dynamism. The number of operations is expected to improve as the conditions for access to financing ease with the expected reductions in interest rates by the European Central Bank (ECB).. For the moment, the monetary authority maintains the level at around 4.5% and looks to June to take the step towards the first cut, a movement that the markets are already anticipating.. Although in recent months it has stagnated above 3.6%, the Euribor has already fallen compared to the 4.1% it surpassed in the second half of last year, for example.

“During the first half of the year, we will see how banks adjust their mortgage offers and offer attractive products for home buyers.. We may even witness a new banking war like the one waged by entities when rates began to escalate,” predicts Matos, who points out that the tightening of monetary policy has not frozen demand, which is above the figures. pre-pandemic. “If the de-escalation forecasts by the ECB are confirmed and begin in June, we will once again see how access to housing improves as the conditions for access to mortgage credit are lowered and how the demand that was kept waiting will return to the market with strength, so 2024 brings with it high expectations in terms of sales volume,” he adds.