A jump that has not been seen in a long time. That is what happened in the real estate market in April, when notarial statistics recorded an increase in home sales of 25.2% compared to the previous year. Specifically, that month 61,683 homes changed hands. Spain had not surpassed the barrier of 60,000 operations since June 2023 and had not experienced such a large increase in the real estate business since January 2022. But then the context was very different: the market was compared to months of anemia due to the effect of the covid -19 (January 2021, for example, was a period of new confinements due to what is known as the third wave of the pandemic).
On this occasion, what has worked in its favor is seasonality. As Easter fell in March, operations slowed down that month and possibly many firms were postponed until April. Furthermore, it coincides that in 2023 the holidays did fall in the fourth month, so the comparison with the previous year is now favorable for growth. If the ups and downs of the pandemic and its recovery are ignored, for example, a similar percentage increase can be found in March 2017, when something similar happened (the previous year the market had suffered the festive parenthesis and that year it did not do so). .
In any case, the notarial statistics, which are different from the official INE statistics because they take data from property registries, have been showing a certain reactivation of the market since the beginning of the year. This began to decline at the end of 2022, after the rise of the end of the pandemic (then the demand that had been trapped in the confinements, the forced savings that many households experienced and very favorable interest rates played in their favor) and coinciding with a tightening in the granting of credit, following the rise in official interest rates to combat inflation.
The market sign returned to positive last January, according to notary figures. Many experts consider this series a kind of advanced indicator of what, a couple of months late, the official statistics later show, which still does not reflect that improvement. In any case, it does seem that the market is close to finding its footing and normalizing after years of ups and downs caused by the pandemic crisis. In addition, this Thursday the European Central Bank is expected to begin the path of lowering interest rates, which since 2022 has caused an unprecedented increase in the cost of credit.
This should encourage a mortgage market that suffered even more last year than the transactions themselves. Now, consequently, it shows a greater rebound. The 30,147 mortgages for home acquisition reported by Spanish notaries in April represent a year-on-year growth of 37.8%. In this case, we have to go until the summer of 2021 to find a similar precedent. The data also indicate that the average amount of loans increased by 0.9% year-on-year, reaching an average of 147,543 euros.
This last data could be a sign that banks have begun to move their offer, given the expected inflection of monetary policy, to attract more clients. In 2023, borrowers tended to ask the bank for smaller amounts and draw on savings as much as possible, a way to contain monthly loan payments. And this despite the fact that house prices have continued to rise throughout the period, both when the trading volume was declining and now that it is rising again. In April, the average price of transactions signed before a notary stood at 1,669 euros per square meter, 5% more than a year before. The continuous rise in prices exacerbates the problem of accessibility to housing that Spain has had for a long time.
Cantabria (32.6%), the Balearic Islands (27.7%) and La Rioja (22.1%) led the regional growth in house prices, which, on the other hand, became cheaper in the Basque Country, Asturias, Aragon, Castilla-La Mancha and Navarra. The Balearic Islands, with 3,786 euros per square meter, remained the territory with the most expensive houses, followed by Madrid and the Basque Country. Regarding activity, the volume of sales skyrocketed in La Rioja (51% more than in the same month of 2023), Extremadura (48.2%) and Castilla y León (37.8%). In the Balearic Islands the market contracted 3.1%.
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