Why are house prices not falling?
In 2022 the price of housing is not likely to fall. The sale and purchase of property in Spain, especially in large cities, is experiencing a golden age. The two driving forces behind this increase are the economic recovery after the pandemic and the record savings of families. At 11Onze we give you the keys to analyse the real estate sector.
Although experts are still debating whether a new real estate bubble is in the making, the truth is that there is a consensus that housing prices will continue to rise in 2022. Thus, the Spanish Association of Value Analysis points to an increase of up to 5% in new properties and 6% in second-hand homes. And Idealista has calculated that sales and purchases in Spain are likely to remain above 550,000 units.
The number of property sales and purchases is spectacular, especially if we consider that more flats have been sold in Spain since the summer of last year than at the height of the property boom in 2008. If we analyse the figures in more detail, we draw the same conclusion. According to Idealista, the residential sector in the city of Barcelona closed 2021 with an investment of 627 million euros. This implies an increase of 124% compared to 2020 and 116% compared to 2019.
The reasons for the increase in price
According to analysts, there are several factors that must be taken into account to understand why housing prices are rising unabated. In terms of buyer sentiment, on the one hand, there is the reactivation of consumption after the slowdown, which has caused the demand that until now had been stagnant to suddenly awaken. On the other hand, there is a record level of household savings.
Moreover, in a context of high inflation, which has reached 6.7% at the end of 2021, families are looking for a return on their money in fixed assets, which are currently a safe haven investment. And this also encourages young people to look for their first home, especially in the periphery. In addition, of course, good financing conditions and the fear that prices will rise even more, two facts that have led to an acceleration of purchases.
At the same time, experts also point out that, as far as property builders are concerned, new developments have suffered from the blockage of supplies and the rise in the price of raw materials, and this may have pushed up prices in some cases. What is clear is that, if you are thinking of buying a home, in 2022 everything points to prices remaining the same or even rising.
If you liked this article, we recommend you read:
Buy a home in 20223 min read
This 2022 comes with fiscal changes in the purchase of real estate.
Solving young people’s dilemma6 min read
Only 15.8% of the young population is emancipated, the