The price of housing is stabilizing compared to the increases in 2021. Although during the last quarter of last year second-hand properties became more expensive in Spain by 6.4%, according to the National Institute of Statistics (INE), the The most up-to-date data from Idealista indicates a drop in February 2022 for the third consecutive month to 1,814 euros per square meter on average, which is 0.6% less than in January. This moderate change in trend reflects that prices are facing a stabilization scenario, which, together with the favorable financing conditions of banks, makes it a good time to buy a home.
“For buyers it is going to be a very good year, especially because of the good financing conditions,” explains Germán Pérez, president of the appraiser UVE Valoraciones. In the current context of low rates and favorable conditions for take out a mortgage there is a beneficial situation for families who want to finance the purchase of a property. Despite the fact that low interest rates should increase as monetary policy tightens to combat inflation, this rise in rates will take place gradually, which will cause stabilization to be maintained in the sector, albeit with slight increases . “With a perspective of rising interest rates, the sooner the mortgage is contracted, the better the conditions,” adds Paloma Arnaiz, general secretary of the Spanish Association for Value Analysis (AEV).
What will happen to the price of housing in 2022?
Antonio de la Fuente, director of the real estate consultancy Colliers, assures that his forecast until the outbreak of the war in Ukraine was that the price of housing would grow in 2022 at the same rate as inflation in Spain, which according to the European Commission will be 3.6% this year.
Pérez believes, on the contrary, that the price of housing will remain frozen in the medium term and could even become cheaper. “Since the beginning of the pandemic there has been a separation between how prices evolve and how the economy does. While families lost purchasing power, housing became more expensive. This gap will end up being corrected, ”he assures.
Since the start of the pandemic, it has been proven that the behavior of prices has been different depending on the type of home and location. For example, from the point of view of the new construction properties, these have experienced a particular evolution due to the problems that have arisen in the construction sector. The increase in the prices of raw materials, the scarcity of land to build on and the strong increase in demand (derived from the accumulation of savings by families due to confinement and due to the completion of many transactions that had not been carried out due to sanitary restrictions) caused an increase in the price of this type of property. “Since there is a reduced supply and a high demand, prices may grow this year at a rate of 5% or 6%,” says Arnaiz.
In terms of geographical areas, this year there has been a change in trend. During the pandemic, regions that were traditionally out of focus for buyers, such as the Region of Murcia or Galicia, had high demand. Now, little by little this trend is reversing and cities like Madrid, Barcelona, Valencia, Seville, Malaga or Bilbao are once again dominating the market. “Except in large cities, the forecast is that prices tend to stabilize,” says Pérez.
All in all, the situation of low interest rates, the favorable financing conditions offered by banks and the moderate growth in prices make this a good time to buy a house.
Calculator: find out how much you should pay for your home
