House prices in Spain to rise by more than 4%. A study by online portal pisos.com suggests that 2021 has been the busy period for home sales in more than a decade.
The higher sales levels they put down to a combination of inflation fears and the pandemic, the latter resulting in a higher accumulation of savings and the need for a different type of home should lockdowns return. The upshot is that house prices in Spain will rise by more than 4% in 2022.
The forecast follows a busy September with 53,410 sales taking place, the highest number of transactions since April 2008 when 54,801 homes were sold.
Specifically, last September it concluded with 53,410 sale and purchase transactions, an unprecedented figure since the real estate bubble burst in 2008. To find a higher number of transactions, we must go back to April 2008, when 54,801 deals were closed.
Commenting on the rise in demand Ferran Font, a director of pisos.com, said that “once the limits to mobility were removed, interest was unleashed in allocating accumulated savings to real estate assets, but these peaks should not be interpreted as the prelude to a bubble, but rather as the logical response to the demand held during the coronavirus.”
“It is a good time to buy”
According to a spokesperson for the company said, “it is a good time to buy because there is a lot of liquidity and interest rates are very low. In addition, many want to anticipate to avoid losing purchasing power due to inflation and avoid the increase in prices and delays that the lack of materials will generate.”
House prices have risen since the end of the lockdown according to housing portal, but the adjustment has been small and short lived – somewhere between 2 and 3% for second hand homes. This in contrast to the forecast with house prices in Spain to rise by more than 4%.
The cost conundrum
Currently mortgage costs are very low however that is being offset by a scarcity of raw materials, logistic difficulties and a shortage of skilled labour. Referring to the problem Ferran said second hand homes provide better value as do fixed mortgages, the likely scenario being that interest rates will begin to rise sometime next year.
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