Cheaper mortgages and low, expensive rents: home sales soar

BarcelonaHome sales soared 52.3% in March compared to the same month last year, reaching 10,345 transactions in Catalonia, according to provisional data from the National Statistics Institute (INE) published this Friday. This is the best figure for the third month of the year since 2007, the same year the historical series began and just before the real estate bubble burst. Across the country, home sales increased, although less so in Catalonia, by 40.6%, with 62,808 transactions, also the highest volume for a month of March since 2007. In the first quarter as a whole, Catalonia saw 29,782 transactions, 23% more than in the same quarter, and 183,140 homes, a 20.7% increase.

In Catalonia, with the exception of October 2024 (10,925), the number of transactions in a month had not previously exceeded 10,000. Compared to the previous month, February saw a 5.6% increase. Of the total sales, 1,984 were new homes (a 63.8% increase) and 8,361 were second-hand homes (a 49.8% increase). By market, 9,858 transactions were for private housing and only 487 for social housing.

By district, sales soared in all. In the Barcelona area, 6,868 transactions were completed, representing a year-on-year increase of 56.5% compared to March of last year. In the Girona area, sales increased by 17.4%, to 1,172 homes. The Lleida district experienced the greatest increase in home purchase transactions in March, up 108.4% to 790. Finally, in the Tarragona region, sales increased by 43.4% compared to March last year, reaching 1,515 transactions.

In Spain, the largest increases in home purchase transactions occurred in Castile and León, with a 66.1% increase; followed by the Basque Country and Extremadura, with 65.1% and 62.7%, respectively. In contrast, Navarre was the only region to register a decrease, down 7.9%.

More mortgages

The European Central Bank's (ECB) interest rate cuts and the resulting lower mortgage rates are one of the reasons for the increase in home sales. The Notarial Association of Catalonia reported this Friday that mortgage loans for home purchases in Catalonia increased by 28.9% in February and exceeded the Spanish average of 24.2% by more than four percentage points, according to data from the Notarial Observatory of Catalonia.

In total, 5,322 mortgages were issued in the Principality, with an average mortgage value of €181,007, representing a 9.3% increase compared to the same month last year. In the first month of the year, the increase was 33.3%.

The increase in sales and mortgages is skyrocketing despite the continued rise in housing prices. Thus, the 9,097 transactions in Catalonia in February were carried out at an average price of €2,246 per square meter (€/m²), representing an increase of 9.3%. This figure is close to the Spanish average, where the average value per square meter increased by 9.4%. In the previous month, the average price in Catalonia stood at €2,200/m², with a more moderate year-on-year change of 4.5%.

The vice-dean of the Notarial Association of Catalonia, Raquel Iglesias, believes that "the upward trend in the number of authorized mortgage sales and loans in Catalonia observed during the last months of 2024 continues at the beginning of 2025, and there have now been eleven consecutive months of growth, as a reflection of the sustained increase in this type of transactions, the price per square meter also continues to rise."

More foreign buyers

The Notarial Association has also detected an increase in home purchases by foreigners. During the second half of 2024, home purchases and sales by citizens outside Catalonia experienced a 13.3% increase compared to the same period last year, according to the Notarial Observatory of Catalonia. A total of 11,075 transactions were completed. This increase slightly exceeds the figure recorded in Spain, where 69,643 transactions were recorded, representing a 10.2% increase. The price per square meter of properties purchased by foreign buyers stood at €2,597/m², 3.2% more than in the same period last year. This trend is more moderate than that observed in Spain as a whole, where the average price reached €2,367/m², representing an increase of 11%.

During the second half of 2024, French citizens once again led the sale of unregistered housing among non-resident foreigners in Catalonia, continuing the trend from the previous period. In this case, they accounted for 33% of total transactions, followed by Germans, who represented 9%. Among non-resident foreigners, the nationality that carried out the most sales was Moroccans, with 12% of the total; followed by Italians, with 11%.

Buying vs. Renting

Another factor driving home buying and selling is rising rents, which makes paying a mortgage payment more attractive than rent for many families. Thus, the Idealista website, in its assessment of this Friday's data, indicates that rental prices "continue to be the main source of tension in the market," due to the shortage of supply detected by real estate agencies and an unmet demand for people looking for a home to live in and either can't find one or have to pay more, a situation in which "many are moving."

For Ferran Font, head of research at Pisos.com, the sales figures "have not been seen since the last real estate bubble, due to a particularly active demand interested in taking advantage of the situation, with the possibility of taking out a mortgage with very attractive conditions." personal shopper Real estate developer Iñaki Unsain emphasizes that "buyers are investing more in new construction, as the available stock has improved, financing conditions are more favorable, and rising rental prices are leading more people to opt for purchasing, which continues to boost demand."