The current economic context is leading potential property buyers to question if now is the right time to buy, or if it would be better to wait until 2023.
A report by idealista has found that when it comes to buying a home, most consultants believe that, despite the current circumstances, this is a good time. Francisco Sierra, General Manager of Casavo in Spain and Portugal, says that, if we analyse the historical correlation between Euribor and sales, the rise in interest rates does not have a great impact on the number of transactions.
“We believe that 2022 will continue to be a good year to buy a property, as the measures promoted by the ECB to contain inflation will be offset by increased activity from private and institutional investors.” He states that, despite the fact that, as some reports point out, 2023 will be a year marked by a 15 percent drop in sales, the real estate market will stabilise.
Jesús Duque, vice-president of Alfa Inmobiliaria, told idealista that in the next six months the economy could cool down, as a result of the War in Ukraine and all the events it generated in the world economy, such as the decision by the ECB to increase interest rates – which are expected to continue to rise in the coming months. For the specialist, those who want to buy should realistically assess whether a future increase in home loans could have a very negative impact on their financial situation. And evaluate which of the two options they prefer: whether to buy at a higher price and lower interest or vice versa.
Should you sell now or later?
Jesús Duque explains that in the coming months there may be more difficulties in accessing housing credit, higher rates and in some cases greater doubts about the job market. "My opinion is that anyone who can sell now, and can't or doesn't want to wait a year or two to sell, should do it now."
For 2023, Casavo foresees an improvement in the sustainability of the real estate sector, motivated by the measures currently promoted to contain inflation, whose effects we will begin to be seen in the medium or long term. “That is why when we talk about the best time to sell a home, we must highlight that we are at a particularly favourable moment for this, which will continue throughout 2023 as a result of the current economic context, which boosts sales in the face of increased credit”.
What will happen in 2023?
At Alfa Inmobiliaria, their vice president believes that in 2023 there will probably be better offers and lower prices to buy, but also many families will have more difficulties in accessing a mortgage, and interest will be higher. "This price drop could be for a short period of time," he says.
He recommends that, especially for people who are considering a fixed-rate mortgage, it is best to buy now, although you will likely be able to find slightly lower prices in a few months.
According to analysis by Casavo, the rise in housing prices due to the influence of inflation will be offset by the measures promoted by the European institutions to combat this economic situation, giving rise to a very positive scenario in the medium and long term. “Given the market movements, we expect that the rise in interest rates will be accompanied by a slight increase in sales, since housing becomes a “safe haven” in the face of uncertainty”, he says.