There will be more buying and selling operations, prices will remain stable, the available supply will hardly change and the dynamics of the sector will be positive. This is how the next months of real estate activity are presented, according to the agencies grouped in FAI (National Federation of Real Estate Associations). Specifically, the latest barometer of the Federation reveals that 62.82% of real estate agents point to an increase in home sales between July and December of this year, compared to 18.42% who believe that they will be similar, and another 18.72% who think they will be lower. The most optimistic scenario contemplates a 10% increase in sales transactions over the 270,000 carried out in the first part of the year. In this way, and if the forecasts are fulfilled,the market would return to the levels prior to the coronavirus crisis with more than 500,000 operations carried out.
As for prices, the forecast is that they will remain “clearly stable”, since demand pressure is maintained and supply continues to be low. Of course, not all squares will behave in the same way. In the peripheral areas of large cities, prices will rise moderately because it is there where the homes most desired by users are located after the pandemic. This is: more spacious, bright homes with outdoor areas. “In Madrid, beyond the ring of the M-40, the price of single-family homes that have a garden has grown by up to 10% on average. In other large cities such as Barcelona or Valencia the trend is being similar. Clearly, the homes with more square meters are clearly on the rise at the moment “, explains José María Alfaro, general coordinator of FAI.
Regarding the global operation of the market, most real estate agencies assume that the dynamics will be positive in the second half of the year, in line with the analysis made by other players in the sector. In this case, 37.43% of those surveyed expect the situation to improve, 40.94% believe that the situation will be similar, 11.11% foresee that it will be worse, and a minority of 10.53% see the risk of a slowdown. The study also delves into the offer of housing for sale available in the market. Professionals predict that the numbers will remain at the same level as today. This is confirmed by 54% of those surveyed, compared to 45.32% who bet that the opposite will happen. In the same way, 53.80% do not foresee that the time to sell a property will increase, compared to 46.20% who indicate that it does.
FAI’s analysis ensures that the real estate market is “robust” and that the sector will be the key to economic recovery. In addition, there is an “upward trend within reasonable parameters and therefore far from a new real estate bubble”, say the experts, who highlight that both the buyer and the seller are more mature and cautious when taking decisions to buy or sell, as well as being more attentive to short-term economic uncertainties, which may cause downward pressure on prices.
The first part of the year
Regarding the current situation, the barometer indicates that 65% of agencies have increased sales operations by 18% during the first half of the year compared to the same period in 2019. The greatest increase has occurred in homes second-hand habitual , according to 67% of those surveyed, followed by second homes, for 31% of agents, and new-build habitual residence, for 21%. What is the reason for this improvement? Experts attribute it to the decisions to change the house rate, to the effect of retained demand entry as a result of Covid-19, and to the good conditions of access to financing. To this must be added the increased profitability offered by rental homes and the low supply inventory available in certain areas.
On the other hand, 35% of real estate agencies say that purchase and sale operations have dropped in the first part of the yearwith decreases that in some cases reach 19.5% on average. In this case, the adjustment is explained by the cooling of the economy, the shortage of housing supply, the demands to access real estate credit, the lack of assistance to buyers or the strength of the rental option compared to the purchase. “It has been a very good year, almost no one expected the dynamics to be what it is. Now,” says José María Alfaro. The Federation barometer also analyzes the supply of properties for sale from inheritances. On this issue, more than half of the surveyed agents assure that there has been an increase of 15% on average, compared to 41.23% who indicate that they have not noticed an increase in this regard.
Regarding the rental market, the Federation anticipates a slight recovery in prices,although he believes that in no case will they return to the levels of 2019, which he considers “healthy”. The pandemic reduced rental prices by up to 15% in cities such as Madrid or Barcelona. “This is the law of supply and demand. Now there has been greater vacancy of rental properties so it is a little easier to rent a home. In 2019 the situation was very complicated for tenants, which worsened with the Rental Law approved that year “. Regarding the future Housing Law, real estate agents reject any measure that intervenes in prices and asks that it include concrete measures in terms of legal certainty for small owners. In his view, this would prevent the withdrawal of properties from the market and the “casting of tenants”.
Source: El Economista, September 2021