The housing market has collapsed. And he has done it suddenly. The number of sales has not only been reduced for the first time in seven years, but, in addition, it is the biggest contraction since 2009. We have to go back to the first year after the bursting of the housing bubble to find a drift worse than the actual. That is, ten years ago. That was the last time the housing business fell above 15%, which is the percentage it contracted in 2019. Not surprisingly, between January and November last year (the National Statistics Institute has yet to publish December data) 3,424 houses were sold in the Canary Islands less than in 2018, an extraordinary decrease that will not be temporary.
In national figures, housing sales decreased last year by 3.6%. In the whole country, 466,318 properties were sold (in the absence of adding the December operations), that is, 17,512 less than in the same period of 2018. A considerable fall that becomes worrying in the case of the Islands. In fact, the decrease experienced in the Autonomous Community quadruplica (in fact even more than quadrupling it) the national data, which serves to illustrate to what extent the real estate market deteriorated in 2019.
Not even in one of the first 11 months of last year there was an increase in house sales in the Canary Islands. Or what is the same: there was not a month of respite for entrepreneurs and professionals in the sector. Nor in December, as advanced from the Professional Association of Real Estate Experts (APEI) before the official statistics publish the final numbers. From January to November, 19,358 homes were sold in the Islands, while there were 22,782 in the same period of the previous year, an evident “cooling”, in the words of the APEI delegate in the Autonomous Community, Isidro Martín, which will not improve in 2020 Nor in 2021. “I do not see it … 2020 will be a very hard transition year and it will also be difficult to start in 2021,” said Martin. Everything seems, therefore, that the real estate market has put an end to the upward trend that began in 2013.
In 2007, the year in which the economic crisis broke out with that first chapter of mortgagessubprimeor garbage, a whopping 30,138 properties were sold in the Archipelago (always taking the January-November period as a reference). The following year, the first one completely plunged into the crisis, the business collapsed after the sale of operations fell above 20%. And the thing was not there, since 2009 would close with another spectacular fall of almost 29%. The more than 30,000 sales of 2007 already barely exceeded 17,000 just two years later. Since then, and despite the fact that the market continued to contract also in 2010, 2011 and 2012 (although to a lesser extent), there had never been a decline as large as that experienced last year. Moreover, after hitting bottom in 2012, when just over 13,000 operations were accounted for, six consecutive years of climbing were chained, a streak that is now breaking. In that six-year period (2013-2018), transactions increased in percentages that range between 12.2% in 2016 and 6.3% in 2018. Thus, the business passed in just one year of growing above six points to fall 15%.
Behind this radical change in trend there are, according to the APEI representative in the Canary Islands, both exogenous and more or less domestic factors. Among the first cites the instability of the oil market, uncertainty in the stock exchanges and trade wars, for example; and among the latter, investors’ doubts about the policies of the new Government and, above all, high prices. With the wages contained, the same pace of sales could hardly be maintained at the current prices.