This will be the recession that will hinder access to housing in Spain next fall – MUNDO DEPORTIVO

When the Covid-19 pandemic began in 2020, due to uncertainty, property prices plummeted, making access to housing easier than ever. After a year, as things returned to normal and the market healed, house prices began to rise considerably. Although prices have continued to rise this summer, this situation could take a turn in the fall. Currently, the economy is facing a recession that has already begun to take its toll on great world powers such as the United States, and that will apparently reach our country in the fall. This recession arises as a result of the inflation experienced, which has eroded the purchasing power of Spanish families. Likewise, the rise in interest rates plays an important role, making mortgages more expensive, which could continue to rise after the new ‘banking tax’. Acquiring real estate, an increasingly complex task According to the INE, the month of August has shown a fall of 3.2% in the sale of homes compared to the month of May. The data contrasts with the data for 2020 and 2021 in which the market was on the rise with a rise of 22.7% and 3.8% respectively. These data could be the first symptoms of the cooling of the real estate market. Although the experts do not want to alarm the population, they speak of a “change in trend in the real estate market”, which would mean a moderation in demand and prices. Likewise, they emphasize the good situation from which we are starting, since the sale of houses is at its best since the real estate bubble of 2007. What happens if the economy cools? Luis Fabra, director of real estate studies at the University of Zaragoza, speaks of a concept known as the “self-fulfilling prophecy”: that the real estate slowdown occurs would not be caused by real market conditions, but by the simple fear of people that it will occur. In addition, he adds: “Citizens read newspapers, listen to the radio… and when they are told that there will be a recession, there is always a percentage of them who take it into account because those messages permeate and paralyze their purchase decision.” That generated fear would end up producing the prophecy by itself. Fabra points out: “If we enter a recession and GDP falls, obviously employment will be affected and so will house purchases.” The halt in the housing sector will depend on three factors: the damage to economic activity inflicted by the recession, its impact on employment and how rates evolve. Finally, he adds: “The last rise to 0.5% is small, but the Euribor is already at 1%, so a higher rise is being anticipated. If that happens, financing for their home would become more expensive for families and the demand on these households will be greater because their ability to pay is already being reduced as other products in their basket become more expensive. read also