Almost 331,000 houses changed hands in Spain in the first half of 2022. This is a figure that has not been known for many years, 15 exactly, because few houses have been sold since 2007. In that year, some 342,000 houses have sold in the second half of the year, when some cooling started to be felt in a sector that was going crazy (between January and June 2007, more than 432,000 houses were sold, and in 2006 the activity was perhaps more important although the Institute’s National Statistics Office did not collect the data). But unlike when cranes colonized cities and construction accounted for more than 10% of GDP, now there are hardly any new constructions. Less than one in five purchases between January and June were for new homes. The conclusion is obvious: the second hand pulls the sector like never before.
Sales of second-hand homes between January and June this year, according to data provided by the INE this Friday, were close to 270,000. Never, not even in 2007, had something like this been experienced. The best semester to date totals 256,000 operations, which means that Spain is in this segment of activity above the records of the years of the real estate bubble at the beginning of the century. And, as then, with the price increase so far.
The trend began to be seen already at the end of 2021 and it was prolonged (and accentuated) during the first part of this year. If in July of last year Spain managed to exceed 50,000 home sales (a milestone that had not been reached since 2008), in recent months the bar has been around 60,000 operations monthly. May topped that figure and June fell back somewhat, but it wasn’t far behind: 58,010 homes sold, 48,188 of which were used (the third-highest record in the statistical series, surpassed only by January 2007 and May of this year).
The x-ray of last June’s operations also leaves other clues that clearly reflect the moment in the real estate market. While more than eight out of 10 homes sold are second-hand, even more (nine out of 10) are vacant homes. Seen from the opposite angle, out of more than 58,000 sales, only 4,309 matched with real estate that has some type of official protection. The market is therefore developing above all in free second-hand housing. And the lure of investment buys is felt in the type of seller: transactions in which the buyer is a legal person (i.e. a company) grow faster than those in which a natural person buys. Although the latter does not imply that individuals continue to dominate the market overwhelmingly: they added almost 54,000 of the 58,000 monthly sales.
general increase
Year-to-date from January to June, home sales rose 23.1%, according to the INE. In other words, almost a quarter more was sold in the first half of the year than in the same months of 2021. But seven autonomous communities exceeded this rate, with the Balearics (54.6%), La Rioja (34.9%) and the Valencian Community (34.7%) in the lead. Conversely, Navarre (7.2%), Madrid (9.7%) and the Basque Country (11.2%) experienced the weakest half-yearly growth. In the autonomous cities, the behavior could not have been more disparate: if in Ceuta the operations jumped by 73.7% over one year, in Melilla they fell by 11.2%. Looking only at the month of June, more homes were sold in all territories than in the same month of 2021, with the exception of Madrid, where sales fell by 6.3%.
The analyzes largely agree. “2022 is much more intense and with better data than last year”, describes María Matos, director of studies for the Fotocasa portal. “If this intense pace of trading continued like this,” adds the expert, “we could close well above 600,000 trades and it would be the best year since 2007.” However, it is not clear that the fuel that has fueled the real estate market lately will remain so powerful in the months to come. In another note sent to the media, Francisco Iñarreta, spokesperson for Idealista, believes that the figures published this Friday respond “to the strength that demand has shown due to historically low mortgagesthe desire to change homes and the record savings of many families”.
The first of these conditions has radically changed. In July, the European Central Bank raised official interest rates for the first time in six years and it did it with the biggest rise in 22 years. “The consequent tightening of mortgage conditions by banking entities is going to mean that the second half of the year will not show such high activity and we will surely stop seeing historical figures,” predicts Matos. He also alludes to “rampant inflation” because “little by little it will start to make a dent in the pocket Spanish households. In other words, two circumstances (low interest rates and accumulated savings) out of the three mentioned by Iñarreta are disappearing or about to disappear. For this reason, the Idealista spokesperson also points out that “in the coming months we will see a stabilization of the data, or even a decline”.