RESIDENTIAL property sales have been shrinking consistently throughout 2023, but latest figures show this trend is relenting.
The most recent data available from the National Statistics Institute (INE) are up to and including the month of October, and reveal an increase of 4% in estate agency market activity from September 2023.
Decline in sales and purchases is directly related to soaring Eurozone interest rates, which have now had an impact on all annually-reviewed variable-rate mortgages in Spain.
So far, the 11.1% fall in transactions in October 2023 based upon the same month last year has been one of the least dramatic since January, INE figures reveal.
On average, home sales have fallen year on year in 2023 by 8.7%, almost entirely due to the huge increases in the Euribor – the interest rate that applies to the common currency.
October 2023 saw 45,903 residential properties bought and sold, of which pre-owned homes made up around eight in 10 of the total – 37,056 overall - but which were down 13.5% on October 2022 figures.
New build sales increased very slightly year on year to a total of 8,847, being a rise of 0.8%.
Although Euribor rate hikes do not affect those buying property in cash, the dramatic rise in interest has led potential buyers to stall their plans if they need a mortgage, given the extra expense involved and the likelihood of having to moderate their home-purchasing ambitions.
Euribor below 4% and frozen for second consecutive month
The European Central Bank (BCE), led by former International Monetary Fund (FMI) chairwoman Christine Lagarde, has opted to freeze rates for December – the second consecutive month with no increases.
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