Home buying and selling activity maintains a positive pace.
In October, the numbers continue to resist variations in interest rates, showing a monthly volume similar to that of 2019, before the pandemic. This phenomenon indicates a return to normality and the usual market dynamics after a period of stimulation.
As of October this year, more than 500,000 real estate transactions have been recorded, and it is projected that if this trend persists, 2023 could become the "second or third best year since 2007."
The most recent data from the INE on real estate transactions for October 2023 shows an increase of 4.1% compared to the previous month, but a decrease of 11.1% compared to the same period of the previous year. Despite the year-on-year drop, it is important to contextualize it in relation to August 2022. The October figure continues to resist rate increases and reflects a monthly volume similar to that of 2019, which indicates a return to normality after a period stimulation.
These data reveal that the real estate market is not experiencing a standstill, but rather an adaptation to the new economic situation of high rates, which is expected to continue throughout much of 2024. Although the year-on-year drop is notable, demand remains solid, exceeding pre-pandemic numbers. Out of stock is a prominent problem, and market analysis shows that demand is five times greater than supply in the purchasing market. Higher inventory could drive transactions even further.
As for new construction homes, they continue to generate interest, representing 19.3% of operations in October. Despite the boom, they face challenges due to higher mortgage prices and increased prices compared to second-hand homes. Demand persists, but limited supply and pricing issues could impact growth.
In summary, there is a slight moderation in purchases compared to previous years, influenced by the increase in prices and higher mortgage prices. This change has affected 60% of buyers, leading 28% to stop the acquisition process. Despite the uncertainty, a dynamic real estate sector is expected in the coming months, although with less notable figures.