Property News
Keep Calm and Carry On
Following the news as well as sales headlines from real estate agents you can get some serious emotional whiplash. For instance in March of this year there were semi-panicked headlines about the fall in home sales in Andalusia as part of a trend of worsening sales. However, just one month later and I’m seeing headlines regarding the recent release of sales statistics for April 2024. These are filled with exuberance and optimism. Year-on-year sales numbers show a 27% increase between April 2023 and April 2024 apparently.
It’s a miracle!
Except that it isn’t and if you want to stay sane and make good decisions, you need to look at the bigger picture. A good example of this is the Covid pandemic and its aftermath.
As is well documented, there was a very big collapse of the housing market in 2020 because of Covid. People couldn’t leave their houses, there was social and economic uncertainty; sales fell. Then in 2021-2022, as everything fully opened up again, all that pent up demand rushed into the market. Sales numbers were explosive, house prices rose dramatically as part of the general rise in inflation, as well as the sudden surge in demand.
In 2022-2023 there was a decline in sales, across Spain that number was close to 10%, according to a Caixa Bank research paper. In Malaga province, annual sales declined from 99,705 in 2022 to 87,694 in 2023, representing a 12% decline in sales.
On the face of it this appears to be a very dramatic decline after the post Covid boom.There are apologists for the decline. Francisco Iñareta, a spokesperson for real estate website idealista.com, believes that the drop in sales was the result of a lack of supply rather than a loss of buyers.
“…the falls are not a disaster for the market, as they seem to be more related to the reduction in the supply available for sale than to a severe drop in demand.
Whatever the cause, the fact remains that the market contracted by at least 10% between 2022-2023. However, looking at the bigger picture we see a different story. According to the National Institute for Statistics, compared to the pre-Covid peakof2018,annual sales in2023 represented a 3.7% increase. That’s actually not bad growth. It also possibly a downward distortion because 2022 may have cannibalised some of 2023’s sales as people jumped into a hot market
Whether or not that trend will continue remains to be seen going forward. But the point stands that those headlines about the sky falling in 2023 were missing the bigger picture. The market continued to grow in 2023. That is also true in relation to sales in 2024.
Sales Trends Remain Stable
When the negative headlinesappeared about March 2024numbers and the exuberance appeared in June about the April 2024numbers, it was clear that some distance was needed in order to discover the real story.
Looking at a chart of April sales 2017-2024 reinforces exactly this point about 2024. There are three anomalies in an otherwise smooth arc – 2020 (Covid), 2022 (post-Covid upsurge) and 2023’s supposed decline.
By Adam Neale | Property News | April 11th, 2024
