Bankinter's Analysis and Markets Department forecasts a slowdown in housing prices for 2022 and 2023
It estimates that the value of residential properties will increase around 1% at the end of this year and another 1% in 2023, following a large rise of 6.4% in 2021.
It is not seeing signs of overheating in prices, as price movements are being supported by the balance between supply and demand.
It predicts somewhat of a cooling in real-estate activity, with an estimated drop in housing transactions of up to 5% this year.
Bankinter's Analysis and Markets Department has reaffirmed its forecast for the real-estate sector in its latest Investment Strategy Report, a document which contains market and macroeconomic estimates for the third quarter of 2022. Therefore, Bankinter's Analysis and Markets Department still thinks that house prices could rise "very moderately" both this year and the next, estimating a rise of around 1% for both 2022 and 2023. Following the 6.4% increase in 2021, this would be a slowdown.
Despite the significant growth in property values last year, the Analysis Department is still not seeing "signs of overheating" in prices on the real-estate market, as reflected in its latest report on the real-estate sector, as they are "well supported ", with effort rates still below the historical average and a balance between supply and demand.
On the one hand, the effort rate for families when paying their mortgage, i.e. the percentage of disposable income spent on paying mortgage instalments, stood at 33% at the end of last year and the forecast expects it to stay at around 35%, the historical average for recent years.
On the other hand, there is somewhat of a balance between supply and demand. The Analysis and Markets Department estimates that there is a structural demand for property of approximately 100,000 units per year, spread between a demand for 70,000 stemming from house building and for 30,000 stemming from foreign demand. On the supply side, the number of new housing projects is at a similar level (in fact, 2021 ended with 100,000 properties under construction) and this threshold is forecasted be exceeded in 2022 and 2023, in order to cover the supply deficit seen in recent years.
The Analysis and Markets Investment Strategy Report also forecasts somewhat of a cooling in real-estate activity. Housing transactions could fall by 5% this year, after hitting a 15-year high last year, when more than half a million sales were made.