Bankinter | House Prices fall -0.8% in Q4 (quarter-on-quarter) vs. +1.7% previously. It is second-hand housing that has suffered the most in this quarter (-1.4 q/q), while new housing continues to increase prices (+1.9% quarter-on-quarter). In year-on-year terms, prices have slackened to +5.5% in 4Q 2022 (year-on-year) vs +7.6% in the previous quarter.
Analysis team’s view: This is the first quarter that prices have fallen in Spain since 4Q20 (a year marked by COVID). This is due to: (i) Higher cost of mortgage financing, in an environment of rising interest rates; (ii) Lower household savings rate, due to higher prices in basic consumer goods (energy and food); and (iii) Less attractive investment in rental housing, with a yield similar to the Spanish 10-year bond.
We maintain our price decline forecasts: -3% in 2023 and -2% in 2024.
