How Spanish real estate demand has changed in the last months
Compared to the 500,000 housing transactions that were recorded last year, by 2020, it could close with a drop from 15% to 25%.
This would mean 70,000 to 125,000 fewer transactions. Ferran Font, portal Pisos.com market research manager, says, that “the key is the payment capacity that families will have when they come out of the crisis.”
In this way, the price of housing would be adjusted in line with the fall in GDP, which, according to forecasts by the Bank of Spain, will fall between 6.6% and 13.6%.
This reveals that the real estate market that was reflected in the recent data published by the National Statistics Institute (INE) has been left behind. In February, home sales grew 0.1% over the previous year, with a total of 44,104 operations.
Oscar Gorgues, Chamber of Barcelona Urban Property manager says that “part of the demand has disappeared. For example, that of people linked to the hotel, tourism, and restaurant sector in Barcelona who had income expectations that they no longer have now.”
According to the executive, real estate agencies – closed since the state of the crisis began – will no longer be able to close many transactions that remained to be signed. In any case, prices are expected to be lower for future purchases/sales.
Architects Could Lose More Than Half Of Their Work
The Bank of Spain has warned appraisers that in the current situation where there are hardly any transactions, it is not possible to know how much a home is really worth. Therefore, it has warned the associations of appraisal companies, to be cautious when valuing properties. .
This is because it is expected that there will be a high degree of uncertainty in the value of transactions until there are a large number of them, which gives the certainty that the market has normalized and there is a new level of equilibrium prices.
Architects have not been exempt from the coronavirus crisis. In fact, 67% of them say that their workload has fallen -with an average drop of 57% in activity-, as pointed out by a survey carried out by the College of Architects of Catalonia (COAC).
The Catalan architects expect their workload to be reduced by 50% this year, and their income to be 40% lower than last year.