Prohibitive housing prices and a volume of activity that rebounds strongly. That is the apparent paradox that the real estate market is experiencing, which in September and October has registered levels of operations unknown in a long time, according to INE data. The reduction in mortgage prices in recent months, experts believe, has encouraged more people to look for (and find) a home. “It is an intense demand, which has been waiting to be able to buy for two years, and sees the situation as now or never,” summarizes María Matos, head of studies at Fotocasa.
In August, that portal drew up its latest profile of the home buyer: 42 years old on average, with a medium-high socioeconomic level and who wants a two-bedroom house. Matos believes that hasn’t changed much. That there are more people who buy, but not because more young people or lower-middle classes are entering the market. For these, the amounts are a barrier, but not to prevent the rebound in activity of recent months. “We do not see that price is an impediment because there is still a lot of volume of less vulnerable buyers,” indicates the Fotocasa spokesperson.
Sergio Carbajal, head of Mortgages at the Rastreator comparator, agrees with her: “We have not noticed a very significant change in profile, but we have seen more demand, mainly because rates are falling,” he describes. In your case, the typical client is a 39-year-old person, with an indefinite contract and who requests a loan with an average term of 23 years. There has also not been much variation, he adds, in the type of mortgage product that home buyers subscribe to: 72% sign fixed mortgages and 27% mixed mortgages (with a fixed fee for the first few years that later become variable).
The change in monetary policy has been fundamental. After the steepest rate increase in history, last June the European Central Bank lowered the official cost of money. Since then it has done so on three other occasions, and those expectations have been reflected in the Euribor (which does not directly depend on what the ECB does, but usually reflects the trend) and also in the banks’ mortgage offers. “Everything has returned a bit to the dynamic before the rate hike,” says Carbajal.
That moment, after the pandemic and before runaway inflation, is key to understanding the current moment according to many experts. 2022 was a record year in the volume of second-hand transactions and, in total terms, the largest since 2007. But the year lost momentum as inflation took its toll on pockets and mortgages became more expensive. That put a portion of the demand that was bottled up during the health crisis on hold. “In the first half of the year there were a little more doubts and many were waiting to see what rate policy the ECB was going to follow,” explains Ferran Font, director of studies at Pisos.com. He adds that “many buyers are bringing forward their decision because prices are rising and there is fear that if they continue doing so it will no longer compensate for the drop in interest.”
These rushes are seen in real estate agencies. Lázaro Cubero, director of Analysis at the Tecnocasa group, indicates that the purchase decision (from when a person shows interest in purchasing a home until they sign the deposit for a flat) currently takes an average of 72 days. “In 2022, which was a record for second-hand sales, it was 83 days, and before the pandemic it was 92 days,” he highlights. The increase in demand pressure is also observed in the fact that each of its offices has an average of 350 interested in buying, although Cubero believes that the increase reflected by the INE (51% in October) is punctual and we are talking about increases in volume closer to 10%. In fact, the official statistics themselves show an accumulated growth (between January and October, compared to the same period in 2023) of 7.5%.
The Tecnocasa expert also points to the mortgage market as the main vector of change. “The main difference we see compared to last year is that then 57% of buyers requested a mortgage and now that percentage is 66%,” he clarifies. A year ago, half of cash purchases were more frequent, which is frequently associated with investment profiles or very high solvency (also with foreigners who may have requested a loan in their country of origin). Otherwise, the data managed by the real estate group point to a relatively stable demand for first homes (69% of buyers), although they do observe a slight increase in replacement demand, that is, those who sell their home to buy other. In short, a solvent demand with sufficient savings or family support (banks usually require that at least 20% of the total value of the house be contributed in liquid money, plus tax or other expenses) to take advantage of a more favorable credit situation. favorable.
At the moment, no one believes that the entry of more young people into the market, with the extension of mortgage guarantees, is being significant. While there remains a significant percentage of investors (25%, according to Tecnocasa) and foreigners who want a house in Spain (15% of the total buyers, according to data from property registrars, adding both foreign residents as well as non-residents). These increase the demand considered solvent, which is capable of resisting the rise in prices and taking advantage of the drop in interest rates. Also to escape into a rental market with dissuasive prices. But the purchasing power is not eternal. “Prices are going to continue rising,” Matos warns, “that is going to undermine the market at some point and perhaps that is what we see in 2026.”
