The price of housing yields 0.8% in August

The average price of housing (new and used) in Spain fell by 0.8% in August compared to the figure for July, although it grew by 8.5% compared to the eighth month of 2021, still standing at 21.2 % below the highs at the end of 2007, according to Tinsa IMIE General and Large Markets statistics.

“The residential market repeats the pattern of previous years and shows in August a break in the price growth trend experienced in previous months,” explains Tinsa in its report.

As detailed in the study, this negative monthly variation in August, led by the capitals and large cities and the islands, is recurrent in the price series and therefore has a seasonal component associated with the decrease in activity during the holiday period. .

On their side, the groups of ‘metropolitan areas’, ‘Mediterranean coast’ and ‘rest of areas’ have remained stable, with variations close to 0%”, pointed out the director of the Tinsa Studies Service , Cristina Arias.

Specifically, the ‘capitals and large cities’ stand out among the groups analyzed with the greatest drop in prices within a moderate correction scenario, with a decrease of 0.9% between July and August, followed by the island territories (-0, 5% monthly), where the evolution of prices had been moderating for several months.

For their part, the ‘metropolitan areas’ and the ‘Mediterranean coast’ remained practically unchanged in August, with variations of 0% and -0.1%, respectively. Only the smallest towns in the interior of the peninsula and on the Atlantic coast, grouped into ‘rest of municipalities’, slightly increased their average value in August in a monthly rate of 0.1%.

Arias has highlighted, however, that in year-on-year terms, “all areas reflect significant increases compared to August last year, since the general acceleration in residential prices did not begin last year until the last quarter of 2021.”

The director of the Tinsa Studies Service has pointed out that, after the first half of the year in which residential demand has maintained an upward trend, with year-on-year increases in the accumulated volume of sales and mortgages, with a view to the second half of the year “The reduction in the purchasing power of households derived from rising inflation above wage growth, the drop in the consumer confidence index in the face of lower economic growth prospects and the increase in interest rates that makes mortgages more expensive can act as decelerating elements in the growth of the demand for residential products».

Arias has also indicated that the increase in rental prices resulting from the transfer of the demand for sale to rental, can increase investment, especially in large cities and metropolitan areas with significant economic activity, as well as in other attractive municipalities with respect to the new dynamics of teleworking.

Source: Noticias Bancarias, September 2022