MADRID, 25 Oct. (EUROPA PRESS) -

House prices will slow down in the coming quarters, although it is estimated that year-on-year growth will be close to 5% by 2023 in the case of used housing, while an increase of 3% is expected by 2024, according to extracted from the XVIII Valuation Observatory of the Spanish Association for Value Analysis (AEV).

In the case of new housing, its price is expected to close 2023 with a growth of more than 6%, and then grow throughout 2024 at around 4-5%.

However, the most conservative professionals believe that used housing prices will grow by around 2-3% in 2023, but they point to stagnation or a slight decline for 2024.

Thus, it is estimated that, by the end of 2024, the price of used housing will reach a 'ceiling' of 2,000 euros per square meter on average, while the price of new homes will accelerate "more quickly."

Despite this, the majority of the panelists affirm that in Spain there will not be a "contagion effect" of the international situation with regard to prices, since, although the increase in interest rates has an undeniable effect on the market, in Spain there are many towns and districts of large cities that have not managed to recover the price levels they reached before the great real estate crisis of 2007-2008.

Rental prices in Spain have increased rapidly since the beginning of 2022 and have exceeded pre-pandemic levels, with rates of more than 20% year-on-year growth in some cities such as Barcelona, ​​Malaga, Palma de Mallorca or Valencia.

The report points out that the recovery of post-pandemic activity and the increase in economic activity, with the population attraction that this implies to the mentioned cities, would be responsible for this acceleration.

Thus, 80% of the internal panelists and 67% of the external panelists predict that the rental price will continue to grow, while the rest consider that it will remain the same.

The lower dynamism of transactions seen in the first quarter of the year makes specialists affirm that there will be a significant reduction in transaction volumes for the years 2023 and 2024 compared to the figures observed in the previous fiscal year 2022.

Thus, falls of between 10 and 20% are expected in year-on-year terms, which would give a total number of housing transactions of between 550,000 and 650,000 transactions, in the most optimistic scenario.

"This would mean a gradual return to the historical average for Spain, with volumes similar to those experienced in 2018 or 2019," they noted in the report.

In this sense, the vast majority of panelists consider that investment and replacement demand will not be able to compensate for the loss of dynamism or capacity of first access demand (that which depends to a greater extent on mortgage financing), which results in the drops in activity compared to the previous year that are expected to take place.

However, the report highlights that the proportion of transactions that do not have financial support has grown in the last two years above 40%, which suggests that there is a transfer of capital from other sectors to real estate and that purchases are being made " in cash" on an increasing basis, possibly attracted by prices that have not increased in a decade and that constitute advantageous purchases for investment.

On the other hand, the study shows that the employment and production indicators of the residential sector are not recovering, with a reduction in housing starts and in the completion of works, which causes "losing hope" that the increase in construction necessary to provide housing to the Spanish markets.

Likewise, there continues to be a credit restriction in the construction sector, now accentuated by an increase in the cost of financing derived from the increase in rates.

To alleviate this situation, the AEV has requested a streamlining of land transformation, in order to lower the price of what is currently the most expensive component that makes up the cost of a home, streamlining the granting of licenses. of works, a more efficient use of public land through public-private collaboration agreements and a balanced regulation of rights and obligations for the parties involved in rental contracts.

Likewise, from the private sphere, they consider it necessary to promote the industrialization of construction, as well as implement talent attraction, training and retention programs, while they believe it is necessary to study a model of territorial growth distributed in secondary capitals, favoring investment for creation. of activity and employment centers that help moderate excessive population concentrations.

"An ambitious action plan with a vision for the future is necessary to help resolve the shortage of new construction and the imbalances between supply and demand that we are experiencing in both the sales and rental markets," indicated the general secretary of the AEV, Paloma Arnaiz.