CYCLE CHANGE?

This is the Summary of the Report of the 3rd Quarter of the Real Estate Market in Catalonia prepared by the API Catalunya Col·legis i Associació d'Agents Immobiliaris de Catalunya.

"The number of home sales accumulates a new quarterly decline, leading to the achievement of negative rates in three of the last four quarters, defining a clear change in the real estate cycle.

In absolute terms, levels still remain higher than those recorded before the health crisis (2017-2019), but with a progressive tendency to reach these average levels. The growth in interest rates continues to impact the dynamics of the real estate market, despite the fact that the level of intensity in the upward behavior of said variable has softened.

The socioeconomic context continues to show a certain favorable sign as a whole, although with a progressive weakening of the positive impact.

The evolution of the number of inhabitants, the formation of households, employment, salaries, and economic activity is positive, but with a progressive decrease in its favorable tone, which presages a change of scenario, materialized in the growth of the level of savings .

On the contrary, investor attractiveness is weakening as a result of the greater profitability of alternative investments, as well as expectations regarding the evolution of housing prices. In this sense, housing prices continue to show a slight positive sign in their quarterly evolution, which is leading to a rapid deceleration of interannual rates.

It is a matter of time before purchase and sale prices begin to correct as a result of the reduction in demand. In fact, offer prices already reflect the first declines. One of the most positive factors is the strength of foreign demand, with maximum percentage levels, although with decreases in absolute terms, but in a lower proportion than the national buyer.

The mortgage market continues to show rationality, moderating debt levels. On the contrary, the rental market intensifies its problems, with a continuation of the reduction in supply and the increase in prices."

Source: API Catalunya Col·legis i Associació d'Agents Immobiliaris de Catalunya.