October 22, 2020

Homeowners lower their sales expectations due to the pandemic


Madrid

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Homeowners are beginning to realize that they must lower their sales expectations. This is corroborated by the Appraisal Society, which highlights in a report presented this Thursday that the difference between the starting price and the final sale price is now close to 5%. Just a few months ago, there was a gap of about 15%.

Does this mean that the price of housing is falling sharply? According to the Appraisal Society, no. In fact, the appraiser ensures that house prices grew 1.6% until the first half. The asking price has been relaxed, but now the negotiations are shorter and there are no big discounts to determine the final price of a home.

Valuation Society analyzes in its report the prices of new and used housing until the month of June. It still does not have data for the third quarter, and ensures that it is difficult to determine how prices will evolve, if there will be falls. Tinsa, another of the major appraisers on the market, did notice a decline in the third quarter: according to its calculations, between June and September prices fell 0.4%.

The CEO of the Appraisal Society, Juan Fernández-Aceytuno, does not rule out a change in the cycle in the future, but is committed to the moment for a “moderation” of prices. Regarding the drop in expectations, he considers that these occur because starting prices “were skyrocketing in cities such as Madrid and Barcelona.”

He also stressed that new housing is holding up better prices and that used housing has more negotiating power. On the other hand, it has highlighted that there is a growing interest in properties that are outside the urban areas and that have terraces, better views or gardens, as well as a better provision of common services.

Shelter value

According to the report of Appraisal Society, the highest average amount at the end of June occurred in Barcelona, ​​with an average price per square meter of 2,743 euros, followed by Madrid (2,630 euros per square meter). On the contrary, the lowest figures were registered in Lugo (877 euros) and in Badajoz (896 euros per square meter).

By autonomous communities, all registered a price increase in the last year. At the head of the increases was Madrid, with a rise of 4.3%. They were followed by the Canary Islands (+ 2.9%) and the Balearic Islands (+ 2.7%). On the contrary, the most moderate increases occurred in Galicia (+ 1.5%) and Asturias (+ 1.6%).

Regarding the impact that a new confinement may have on the market, Aceytuno has rejected that sales will be paralyzed. And he stressed that, with the stock market at a minimum, housing “is once again becoming a safe haven”. According to appraiser calculations, the market is being sustained in the first place by the purchase of replacement. But the interest of investors is also being notable, a fact that is reflected in the fact that operations remain stable despite the collapse of the mortgage firm.

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