Housing prices accentuate their rise in the third quarter and rise by 4.5%, but evictions fall by 21.6% in the last year

Neither the drop in sales nor the decline in mortgage signing have managed to force a change in trend in housing prices.. According to data published this Tuesday by the National Institute of Statistics (INE), apartments increased their price between July and September by increasing their price by 4.5% compared to the same period in 2022, an increase that was especially profound in the new home. However, while access to a property is getting tougher for those thinking about buying, foreclosures on homes have been reduced by 21.6% in the last year, in which the suspension of evictions imposed by the Government.

After half a year with increases below 4%, the House Price Index (IPV) rose again in the third quarter, growing 4.5% compared to the level of a year before. This is the largest acceleration in the cost of homes since the end of 2022 – when real estate became more expensive by 5.5% – and the second consecutive after the increase in the IPV in the previous quarter, which ended a year of moderation in prices. Even so, the rate of increase in prices is far from that recorded last year at the same time, when housing prices rose by 7.6% during the summer months and had previously grown by even 8.5% in the first few months. three months of the year.

“The great latent demand that exists in the sector currently continues to push prices up,” assesses the director of Fotocasa Studies, María Matos, who recalls that owners with properties for sale are reluctant to lower prices.. “Probably an important part of this remaining interest is because there are many citizens waiting for a large price drop to occur, a situation that is difficult to occur,” he predicts, ruling out for the moment “significant price drops.”

The rise in property prices was especially contributed by the increase in the cost of newly built housing, which grew by 11% between July and September compared to the same period in 2022 – its highest interannual rate in the last 16 years -, compared to an increase 3.2% in second-hand ones. In this way, the cost of used apartments has maintained a constant rate of increase of around 3% since the beginning of the year.. On the other hand, the price of brand new properties has undertaken a dizzying rise in the last six months, since the increase in prices in the third quarter is added to an increase of 7.7% between April and June. Compared to the second quarter, the cost of new housing grew by 4.1% only in the summer months and that of second-hand housing, by 2.2%.

“We do not believe that new construction is going to suffer moderation and even if demand continues to be so strong, in the coming months we will see how the price continues to increase,” predicts Matos, who attributes the escalation in the cost of these homes to inflation, which affects the price of materials, production and logistics, and the low productivity of new construction. “The difficulties of developers and builders in purchasing final land, the lack of qualified labor in the sector and the increase in the price of materials derived from the rise in energy prices and the war in Ukraine is causing the stock to be low. minimums,” he explains.

The increase in housing prices in the third quarter was widespread throughout the national territory, although with significant differences. The community that registered the greatest increase was Navarra, where the cost of apartments grew by 7.6% compared to 2022. They were followed by the Canary Islands, Cantabria and Andalusia, with annual increases of 6.6%, 5.9% and 5.8% respectively, similar to those of Ceuta and Melilla.. On the other hand, the most moderate increases occurred in Castilla-La Mancha and Extremadura, where prices barely rose by 1% and 1.1% respectively, compared to the third quarter of 2022.

The rise in housing prices is taking its toll on the real estate market, which so far in 2023 has suffered a sharp decline in both sales and mortgage signing after the record figures in 2022.. According to INE data, the granting of loans for the acquisition of real estate was reduced in September – the last month for which data is available – by 29.6% compared to the previous year and the purchase and sale of apartments decreased by 23.7%. , both data accumulating eight consecutive year-on-year falls. “In the final stretch of the year it has been demonstrated that the price of housing is unrelated to the cooling of the market, with sales and mortgages very tight due to the current financial framework,” assesses Ferran Font, Director of Studies at the real estate portal piso.com.

Decrease in evictions

However, despite the fact that the increase in prices increases the difficulties in accessing home ownership, evictions of those who already have a mortgage behind them decreased by 21.6% in the third quarter compared to the same period. 2022, according to data released this Tuesday by the INE. Compared to the second quarter of the year, mortgage foreclosures fell by 37.3% in the quarterly rate at the beginning of the second half of the year.

Between July and September, a total of 2,306 foreclosures were carried out on homes, of which 1,721 were on habitual residences, the lowest figure for a third quarter since 2019 and 16.5% less than in 2022. Homes accounted for 69.7% of the mortgage foreclosures recorded in the third quarter—not all of them end in eviction.

Mortgage foreclosures have accumulated more than a year of year-on-year declines, an evolution that reflects the suspension of evictions extended until the end of the year by the Government in June to reinforce protection for the most vulnerable households. The measure gives judges the ability to stop a launch when the owners of the property do not have more than 10 homes once their socioeconomic situation has been evaluated.

56.3% of the foreclosures initiated on homes in the third quarter corresponded to mortgages established between 2004 and 2008, compared to 11.1% represented by those signed in 2005 and 15.7% represented by those signed in 2006, which represented a similar percentage to those established in 2007. Andalusia was the autonomous community that concentrated the most evictions (592), followed by the Valencian Community (448) and Catalonia (440).