The current economic context, characterized by high inflation and rising interest rates, influences several sectors, notably real estate. And that’s why buyers and sellers are wondering if now is a good time to do business or if it’s better to wait until 2023. Here’s what some experts think.
In general, and when to buy a house, most consultants believe that, despite the current circumstances, now is the right time. Francisco Sierra, general manager of Casavo in Spain and Portugal, says that if we analyze the historical correlation between the Euribor and sales, the rise in interest rates does not have a major impact on the number of transactions.
“We believe that 2022 will continue to be a good year to buy property, as the measures promoted by the ECB containing inflation will be offset by increased activity by private and institutional investors. She clarified that, despite the fact that, as some reports point out, 2023 will be a year marked by a 15% drop in sales, the real estate market will stabilize, “because the impact of rising rates will have an impact on the short term, improving future prospects”.
For his part, Jesús Duque, vice president of Alfa Inmobiliaria, says that in the next six months the economy could cool down, following the war in Ukraine and all the events it has generated. in the global economy, such as the decision by the ECB to raise interest rates – which should continue to increase in the coming months. For the specialist, whoever wants to buy must realistically assess whether a future increase in Mortgages can have a very negative impact on your financial situation. And evaluate which of the two options you prefer: buy at a higher price and at a lower interest or vice versa.
Ernesto Ferrer-Bonsoms, Director of Real Estate at Intrum Spain and Commercial Director at Solvia, explains that in case you want to buy, the best time is now if we need financing, because the interest rate should continue to increase in the coming months. “The interest rate hike by the European Central Bank will affect a large portion of consumer lending, including many mortgages. Additionally, due to the lack of supply, prices are expected to continue to rise, although more moderately than lately.”
If I want to sell, is it better now or later?
Jesús Duque explains that in the coming months we may see more difficulties in accessing the Mortgages, higher rates and, in some cases, greater doubts in the labor market. “My opinion is that anyone who can sell now, and can’t or won’t wait a year or two to sell, should do so now.”
When analyzing a sale of Casavo, remember that we are at a particularly favorable time for the sale of properties, because increases in interest rate moderately increase the number of buying and selling operations, which they believe will happen in the third quarter of the year.
For 2023, Casavo forecasts an improvement in the sustainability of the real estate sector, driven by the measures currently being promoted to contain inflation, the effects of which we will begin to observe in the medium or long term. “That’s why when we talk about the best time to sell a house, Note that we are at a particularly favorable time for this, which will continue throughout 2023 due to the current economic context, which is boosting sales in the face of increased credit, the fight against inflation and the securing property as an investment”.
What will happen in 2023?
At Alfa Inmobiliaria, its vice president believes that in 2023 there will probably be better offers and lower price to buy, but also many families will find it more difficult to access a mortgage, and the interest will certainly be higher. “This price drop could be short-lived,” he says.
He recommends that, especially for people who are thinking of using real estate financing with packageit’s best to buy now, although you can probably find prices a bit lower in a few months.
According to Casavo’s analysis, the rise in housing costs under the influence of inflation will be compensated 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 market moves, we expect higher interest rates to be accompanied by a slight increase in sales, as housing becomes a ‘safe haven’ in the face of uncertainty,” says -he.
However, the specialist considers that the development and growth in the number of commercial operations will be accompanied by a reduction in supply at the start of 2023. However, they consider that these are normal market movements which contribute to improve the dynamics that guarantee the sustainability of the industry.