The real estate market in Andalusia registered increases in the price of rentals and sale of properties. And although the volume of mortgages fell significantly in January, a reactivation of activity is anticipated in 2024, especially in the case of variable mortgages that will require simulate the fee in the face of the imminent stabilization of interest rates.
Status of mortgages in Andalusia
The real estate sector in Andalusia has started the year strongly, and today it challenges the uncertainty that exists at the national level in Spain. In the words of the president of the Junta de Andalucía, Juanma Moreno: "The sector has resisted the onslaught of rising interest rates, the restriction in financing, the increase in costs and the decrease in demand, demonstrating unparalleled strength."
For its part, although it is possible to find great conditions for applying for a mortgage loan in Andalusia, in January there was a decrease of 20.5% in the granting of mortgages in the community compared to the same period for 2023. Meanwhile, at the national level, this value only fell by 15.3% in year-on-year rate, according to data from the National Institute of Statistics (INE).
The total number of mortgages granted in Andalusia was around 6,000 operations. Of the total mortgage loans constituted, the most requested mortgage was the fixed-rate type, with 58.2% of the operations. For their part, variable-rate mortgages represent 41.8%, with average initial interest rates of 3.24% and 3.64%, respectively.
Likewise, the community has demonstrated great performance in terms of visa for new homes, and reached levels of activity that had not been seen for more than a decade and a half. This impulse is fundamental, since the activity related to the new construction market represents approximately 6% of the added value in the Andalusian economy.
Despite this, sector specialists anticipate a reactivation in mortgage operations for the year 2024, in line with the expectation of reductions in interest rates: it is expected that the Euribor will stabilize between 3.2% and 3.4% during the first half of 2024, which bodes well for the mortgage sector in general.
The price of properties in Andalusia
The real estate market in Andalusia presents a panorama of solid growth, especially in the increase in property prices. Indeed, the level of demand and activity has caused an increase of 12.3% in the price per square meter, with Andalusia far exceeding the national average, which stands at 3.5%.
According to the latest data, this increase reflects both the recovery of the market and the growing attractiveness of Andalusia as a residential and investment destination. This growth is four times greater than the national average, which underlines the solidity and dynamism of the real estate sector in the region.
Regarding the sale of homes, Andalusia has also exceeded expectations, and registers a growth of 13.4%, compared to 10.3% for Spain as a whole. This increase is a reflection of a market that is expanding and that concentrates activity on both national and foreign buyers, thus consolidating Andalusia's position as one of the most attractive destinations for real estate investment.
The rental price in Andalusia
The rental market in Andalusia is dynamic and has demonstrated great resilience during the first three months of 2024, with significant increases in both quarterly and year-on-year terms. According to data from sector leaders, the rental price has experienced a quarterly increase of 3.8% and a year-on-year increase of 10.2%. These figures place the average price of rental housing at 10.48 euros per square meter per month.
At the national level, a similar trend is seen, with a new historical maximum in the rental price that affected more than half of the autonomous communities and 14 of the 50 provincial capitals. This situation raises concerns, since, almost two decades after exceeding the levels recorded during the real estate bubble of 2007, prices continue to rise without signs of moderation.
The imbalance between supply and demand is the main driver behind the volatility of the rental market. Currently, the stock of available homes is in a critical phase due to the transfer of residential units to tourist or shared rentals, while demand remains strong and concentrated in the main urban centers. This disparity causes upward tensions in prices, according to experts in the real estate sector.
This phenomenon has also generated a debate about the sustainability of the rental market in the long term and the need to implement measures to guarantee a balance between supply and demand, as well as to protect tenants against disproportionate increases in prices.
Foreign investment in the real estate market of Andalusia
The resistance in housing prices is closely linked to the active participation of foreign investors, who continue to show a marked interest in the Andalusian coast as an investment destination. According to data from the Property Registrars, during the first quarter of the year, international investors carried out a total of 23,300 operations, representing 14.52% of the total purchases made in the region.
British and Russian citizens lead the ranking of acquisitions, followed by Germans and French. These investments are mainly directed towards the tourist areas of the Andalusian coast, with the purpose of allocating the properties for vacation rentals.
The constant growth of tourism and job opportunities continue to drive demand and prices in these areas. This favorable context for foreign investment, according to sector experts, is contributing to the maintenance of activity and stability in the real estate market of Andalusia.
However, it is important to closely monitor this trend to ensure that it does not generate significant distortions in the local market and to ensure that appropriate measures are taken to preserve access to housing for all citizens.
