Basic overview of the housing market in 2024
The housing market in Spain remains a fundamental pillar for both the national economy and investors. The year 2024 presents a complex scenario, influenced by various factors affecting the supply and demand for housing. In this article, we review some key indicators for a basic overview of the housing market in Spain in 2024.
Home sales
Provisional data from the INE (National Statistics Institute) indicate a recovery in home sales in April. The number of transactions increased by 18.3% month-on-month to 53,091. This figure represents a 24% increase compared to the same month in 2023. Second-hand homes continue to dominate, making up nearly 80% of the total transactions in April. The INE also highlights that the increase in activity is higher for new homes (+31.7% annually) than for used ones (+22.3%).
Mortgage signings
In line with the sales data, mortgage signings grew significantly in April, following a dip in March. According to provisional data from the INE, 34,264 mortgages were signed last April. This represents a 15.5% increase from March and, more importantly, a 28% increase from April 2023. Fixed-rate mortgages are gaining ground. Although the first rate cut in eight years occurred in June, fixed-rate mortgages accounted for 51.9% of all those signed in April. The average rate was 3.51% for fixed-rate and 3.25% for variable-rate mortgages.
Housing prices
According to Tinsa, the average value of housing in Spain increased by 0.5% between April and May, with a year-on-year variation of 3.3% over the past 12 months. While the growth rate of housing prices has moderated, it is still on the rise. This trend seems difficult to reverse given the current imbalance between supply and demand. Despite the slower pace, Idealista reports that the increase in the price of second-hand homes has reached new records. This means that levels have surpassed those of June 2007.
New construction permits
There is a broad consensus on the need to produce more housing. However, figures from Asprima show a 2.9% annual decrease over the past 12 months. Similarly, completion certificates have fallen by 33.6% annually. Nevertheless, looking at the period from January to April 2024, the data is more promising. The number of permits nearly reached 42,000 units, representing a 14.35% increase compared to the same period last year.
Interest rates
Finally, on June 6, the first interest rate cut in eight years took place. The 25 basis point reduction has not significantly impacted the mortgage market. The provisional average Euribor rate for June is 3.65%, slightly lower than in May (3.68%) and April (3.70%). Even so, forecasts point to a reduction in the cost of existing mortgages by around 230 euros per year.