Spain's housing market is grappling with a sustained slowdown exacerbated by rising inflation and a high 4.2% Euribor interest rate. Malaga province has seen a significant 16.26% drop in home sales compared to last year, outpacing declines in both the national and Andalucía markets. July witnessed a substantial 23% decline in sales in Malaga province. However, it's worth noting that despite these setbacks, the current housing sales figures, while reduced, remain relatively high compared to levels seen in previous decades. Notably, new home sales in Malaga are declining more sharply than second-hand properties, a contrast to the national and Andalucía trends.
The housing market in Spain is experiencing a continued slowdown. Rising inflation is reducing households’ buying power, and this is worsened by the Euribor interest rate, which currently sits at 4.2%. Property transactions in Malaga province have taken a significant hit. In the first seven months of this year, there were 21,159 home sales and purchases, marking a 16.26% decrease compared to the same period last year when approximately 25,300 transactions occurred, according to data released by Spain’s INE national statistics institute.
This drop in real estate activity in the province is three times more substantial than the declines observed in both the national and Andalucía markets. In the region, from January to July this year, there have been slightly over 74,100 transactions, marking a 5.9% decrease compared to 2022. Nationwide, property sales and purchases have totalled around 364,000 during the same period, reflecting a 5.3% year-on-year decline. In the most recent month with available data, July, there was a substantial drop in sales in Malaga province, exceeding 23%. In July 2022, there were 3,622 sales, but this year, the figure dropped to 2,776.
However, it’s worth noting that despite these declines, housing sales remain relatively high compared to levels seen in the past couple of decades. For instance, in July 2007, just before the financial crisis, there were around 3,600 transactions in the province. On a national scale, the July decrease is limited to 10.5%, falling from nearly 54,000 to 48,303. In Andalucía, there’s an 8.7% drop, with 9,900 homes sold in July
The data also Indicates that in the Malaga real estate market, the performance of newly constructed homes is less favourable than that of previously owned properties. Sales of second-hand homes decreased by 22% in July, dropping from 2,900 to 2,260, whereas transactions for new homes saw a more significant decline of over 28%, falling from 719 to 516. In contrast, at the national level in Spain, the decrease in transactions for new homes was 7.4%, while the drop for second-hand homes was 11%. In Andalucía, the decline for new homes was 5.5%, compared to a 9% drop for second-hand homes.
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