Notice to buyers: house prices will rise more than expected in 2024
By Mas Property
on Thu Feb 22 2024
- The improving economic outlook and the possible drop in interest rates will encourage the market
- CaixaBank estimates a decrease in sales of 10% in 2023
Housing prices have remained resilient despite the rise in interest rates, which has caused a slowdown in residential activity in the last year (with mortgages and sales at low times). The consensus of experts agrees that home values will continue to rise in the coming months; In fact, it will do so more strongly than initially expected .
CaixaBank is the latest entity that has revised upwards its forecasts for the Spanish real estate sector. Now, it estimates that housing will become more expensive by 3.5% in 2024 (compared to 1.4% previously); and 2.5% in 2025 (initially forecast a rise of 2.2%).
Why the change? To the improved economic outlook for 2024 and the expectation that the ECB can begin to lower interest rates before the summer. » The sector will go from less to more this year and will return to the expansionary stage in 2025 ,» said Judit Montoriol, senior economist at CaixaBank Research, during the latest edition of EFIMAD. Specifically, and according to the expert, these data are supported by job creation; immigration flows; the mismatch between supply and demand; a less stressed financial situation of households and the resilience of foreign buyers.
Montoriol also explained that the territories in which the population has grown the most are experiencing greater price increases. This is what is happening in the Balearic Islands, Malaga, Santa Cruz de Tenerife, Madrid or Valencia , where the gap between urban and rural areas, and tourist and non-tourist areas, is increasing.
Regarding purchase and sale operations , the entity has raised its forecasts for 2023 from 550,000 to 592,000, which represents an annual decrease of 10%, but an increase of 17% when compared to pre-pandemic values. For 2014, the forecast is that they will go from 510,000 units to 550,000 and from 511,00 to 552,000 by 2025.
Regarding mortgages , CaixaBank anticipates a decrease of 20% in 2023, with 65% of operations financed with a loan, a lower percentage than in 2022. This responds to the marked weight of the replacement buyer – who does not need financing – and the weight of foreign buyers . Regarding new construction visas, the entity estimates that 110,000 will be granted in 2023 , 115,000 in 2024 and 125,000 in 2025.
Source: elEconomista.es, February 2024