Fear of continuing inflation and the shortage of raw materials accelerates home sales




The housing market is sweet. Against all odds he has been the great winner of the pandemic and now all forecasts continue in his favor. The latest sales data slipped last Monday by the INE It also invites that optimism, after registering 53,410 transactions in September, the highest number of transactions carried out in any month since April 2008, at which time 54,801 were registered.

The same feeling coexists among real estate experts, after a year in which they consider that normality has returned to the market, after the health crisis. “Housing has been one of the bastions of resistance against other sectors that will still take time to return to the levels prior to the emergence of the COVID-19», Points out the director of studios at piso.com, Ferran Font, who believes that 2021 will be the year with the highest sales of the last decade and that the price will rise by 2%, and then boost by 4% in 2022.

Although in a market context that shows sales figures that are similar to those that unleashed the brick crisis, Font believes that the data should not be interpreted as the prelude to a new housing bubble, “But as the logical response to the demand held during the coronavirus.” “It is a good time to buy because there is a lot of liquidity and the interest rates are very low. In addition, many want to anticipate to avoid losing purchasing power due to inflation and avoid the increase in prices and delays that the lack of materials will generate, “the expert clarifies.

But for Font, the rise in prices is not bad news nor should it alarm us, “since it falls within expectations taking into account the upturn in demand, which relies on accumulated savings to face inflation by buying housing and avoiding more volatile markets. Likewise, cheap financing underpins this interest ”, argues Font, who believes that the incentive of the increases and the scarcity of supplies of raw materials will also encourage the increases, due to the blow that it will suppose to the building, although he believes that its affection to the used housing, “it will be something specific.” “Scenarios of abrupt overvaluations are not expected because both supply and demand seek stability”, he concludes.

In any case, Font estimates a 30% growth in sales at the end of the year, with around 550,000 signed sales. “It must be taken into account that after the end of the alarm state, operations that had been left in standby mode were signed. In addition, the redirection of maximum savings towards housing as a safe haven asset will gradually warm up ». By 2022, “the ideal is for the increase in sales to remain around 3%, which is what is in line with what we understand as a healthy functioning of the market,” he says.

Housing law alert

For its part, piso.com also estimates that there will be a new upturn in new construction visas, which it expects to exceed the 10,000 barrier by the end of the year, an increase of 18% compared to 2020, in line with what was 2018 and 2019 before the health crisis. Although everything could change in 2022 if the obligation for developers to allocate 30% of promotions to protected housing that is currently included in the preliminary draft of the housing law is confirmed. For Font, this rule “will block the business plans of many construction companies and will drive away investment in those regions that decide to put it into practice.” At the same time, “it will draw an uneven map when what is needed is for the housing stock to grow in each of the territories in a rational way, obeying viability criteria, and not based on a specific political sign”, he adds.

But in the market, above all, the rental regulation that the Housing Law that the PSOE-Podemos Executive prepares and that intends to punish the large owners by forcing them to lower prices. Although Font estimates “that price control will generate more noise than immediate effects, since the official index will not come into effect until 2024.”

In any case, the spokesperson for flats.com believes that caution should be exercised because punishing large holders is counterproductive. “Not only does it generate legal insecurity and great discomfort within the sector, but the long-awaited professionalization of rental is delayed, which is what guarantees that quality offer is generated.” For this year, the expert from piso.com foresees that the price will fall between -1% and -1.5%.

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