Welcome to the Great Housing Circus!
Well, well, well! It seems the housing sector is stuck at a bit of a crossroads. Prices are shooting through the roof while young people are left standing outside looking in, probably wondering if they’ll ever stop living in their parents’ basements! High prices continue to limit young people’s access to their first apartment and achieving independence. I mean, what’s next? A bumper sticker on your parents’ car that reads, “My kid is still living at home, and I’m proud of it”? Brilliant! Public institutions are now working harder than ever to promote housing construction in both urban and rural environments. Because nothing says “freedom” like a four-bedroom house in the middle of nowhere.
And check this out: Of the more than 15,500 home purchases signed in the last twelve months, just over 9,000 were signed with a mortgage — that’s 58% for those of you who don’t have a calculator handy! This means nearly 40% of buyers are basically tossing their cash around like they’ve just won the lottery! Ahh, I remember when I used to buy groceries with loose change; kids these days are buying entire homes with cash! And it gets better: mortgage credits have dropped by 13.8% compared to the summer of 2023. Can you believe it? Even loans are just giving up and throwing in the towel!
Now, if we delve deeper, the significance of mortgages is fading faster than my hopes of being taller than my friends. In summer 2023, 73% of apartments were snagged thanks to bank credit; a year later, that number has dwindled to 58%. I guess that’s one way to go green—by reducing the paper trail in mortgage agreements! According to the latest report from the Real Estate Market Chair of the University of Zaragoza, it seems mortgages are on the endangered species list!
Now let’s talk location, location, location. In Huesca and Teruel, purchases without a mortgage now account for more than half of all operations—47% and 40%, respectively. Yes, that’s right! It’s a cash-fueled backroom deal! Meanwhile, in the province of Zaragoza, a hefty 63.76% of sales have been financed. Looks like someone forgot to tell those folks that ‘cash is king’ isn’t an actual financial strategy!
Between July and September, over 4,200 homes sold in Aragón—a growth of 14.1% compared to summer 2023. It’s almost like a game of musical chairs, where everyone wants a seat, but only some can hold on! And as for more than 15,500 operations over the last twelve months? That’s impressive! The Chair’s director, Luis Fabra, links this sales rebound to the rental situation. “If someone goes to rent and finds historical highs and overvalued prices, their escape is buying and selling,” he explains. That’s code for “if you can’t afford to rent, join the club.”
Meanwhile, housing prices are still growing “moderately,” around 3.2% compared to last summer, hitting 1,561 euros per square meter! I know, right? I’ve seen better discounts on expired candy! The market’s “sensor”—used housing—has seen an even larger spike of 7.1%, and in Zaragoza, it’s nudging dangerously close to 2,000 euros per meter! Maybe they should start selling square meters instead of homes!
And let’s not forget our international friends. Purchases by foreigners have been surging so much they could start their own club! A staggering 7.66% of all operations in the last year were carried out by foreigners, with Romanians at 29.42%, Moroccans at 16.33%, and Chinese buyers at 6.29%. “We have very relevant activity from foreign buyers,” emphasizes Fabra. And there you have it—a game of Monopoly, but the board is in another country!
Conclusion: A Comedy Worth Watching
So at the end of the day, the housing market is nothing short of a comedic masterpiece. It’s teetering on the edge, where young, fresh-faced adults are often left holding the short end of the stick—if they manage to find a stick in this cash-driven fracas at all! Brace yourselves, folks; the market may just be warming up for more punchlines to come!
The housing sector is currently navigating a critical juncture. While sales witnessed a remarkable surge during the summer months, sky-high property prices persistently hinder the ability of young people to secure their first apartment, hampering their journey to independence from parental homes. To counter this challenge, public institutions are actively engaged in efforts to stimulate housing construction across both urban and rural regions.
In this regard, out of over 15,500 real estate transactions completed in the past year, a little more than 9,000 were financed through mortgages, accounting for merely 58%. This significant statistic indicates that nearly 40% of home purchases were executed with cash payments. Indeed, the number of mortgage approvals has seen a sharp decline of 13.8% in recent months, particularly when compared to the more vibrant summer of 2023.
In fact, the role of mortgages in overall home purchases has been diminishing over recent months. During the summer of 2023, mortgages facilitated the acquisition of 73% of apartments; however, this figure has steadily decreased to 58% over the course of the year, as reported by the latest insights from the Real Estate Market Chair of the University of Zaragoza.
In total, between July and September, the Aragon region saw sales of over 4,200 homes, marking a remarkable growth of 14.1% compared to the summer of 2023. This resurgence not only recovers losses sustained over the past year but also contributes to more than 15,500 transactions recorded in the last twelve months. The Chair correlates this uptick in sales to the current rental market landscape. “With rental prices hitting historic highs and being significantly overvalued, individuals are compelled to consider purchasing as their viable escape route. Although buying is not without its challenges, especially given the fluctuations in interest rates,” stated the director, Luis Fabra.
At the same time, housing prices continue to exhibit moderate growth, climbing by approximately 3.2% since last summer to reach an average of 1,561 euros per square meter, with overall home prices averaging around 136,000 euros. In contrast, the secondary market for used properties has experienced a more pronounced increase of 7.1% over the past year, with prices in Zaragoza capital nearing an astonishing 2,000 euros per square meter.
Likewise, the trend of property purchases by foreigners is on an upward trajectory, with records being shattered over the past twelve months. Notably, 7.66% of all property transactions involved foreign buyers, with Romanians making up 29.42%, Moroccans at 16.33%, and Chinese buyers representing 6.29%. “The influx of foreign buyers has become a significant factor in our market,” emphasizes Fabra.
