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Reasons why the housing market is slowing down

casas madera miniatura flecha roja abajo 72572 906 1 - Reasons why the housing market is slowing down

The price of housing no longer grows as before. The bulky double-digit increments have long since been abandoned. In addition to this contraction, other fundamental market indicators, such as mortgages and sales, are registering a different evolution, moving from the negative to the positive terrain or vice versa from one month to another. The confluence of internal and external factors is making a dent in the sector.

Mortgage scenario

The entry into force of the new Mortgage Law surprised the market with the changing pace. Although it had been talking about its implementation for a long time, this did not prevent banks and notaries from expanding operations. The falls in the granting of mortgages (-29.9%) and in the housing sales (-21.1%) during the month of August have their roots in this regulatory change.

Slow demand

For several years, the residential market has been sustained, in large part, by replacement housing and investment housing. Both buyer profiles are not infinite, and after a while, they have cooled. Today, the relay is taking place at the hands of the first home, a demand that does not have the economic ease of the investor or the repositor, so the pace is slower.

Economic recession

Forecasts on a slowdown in the Spanish economy are increasingly taking shape. Criticisms arriving from Europe anticipate a new breakdown if the necessary readjustments are not made. This uncertainty does not favour the achievement of a stable real estate sector, but it sows distrust and causes its cooling.

Job prospects

Given the echoes of what could be a new crisis, the citizen becomes prudent and prefers to save to spend. An unflattering scenario will dissuade you when making a purchase as important as that of a house, it will not be that your work fails and you return to the default-execution-auction-eviction wheel. If you fear for employment, the dream of owning is inevitably postponed.

Political instability

The political blockade to which the country has been subjected goes back to the moment in which Mario Rajoy did not overcome the motion of censure of the Socialists. The lack of agreement regarding the budgets and the paralysis of the Congress of Deputies mean that the much-desired State pact on housing does not end up being defined.

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3 thoughts on “Reasons why the housing market is slowing down

  1. James White

    Could also have something to do in relation to greed of sellers ?
    Days when anyone bought ruin or reformer for over €80000 are over!
    Agents still adding on they’re 5% commission to vendors price , that just makes potential buyers pissed off and first thing buyers do is deduct that , then negotiate sensible price from there.
    Silly asking prices mean no one even looks at properties, many Brits selling expect to make big profits on dated tired houses that actually bought for peanuts and when Euro was Worth much less than today, this greed to make double profit , they need to wake up !
    Most property on market has been there for over 10 years ! Stupid people !

    Reply
  2. Aurelio

    Yes, really the construction real estate building are so poor in materials and details that people sell 40-50 square meters too much.
    This is causing dommage for new projects that needed to grow up the canary island spending live and salaries growing.
    Also a lot of people nevertheless is coming from has black money.... dommage for taxes purposes and helping growing the processing new réalisation projects as well productivity and training jobs.

    Reply

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