Based on the monthly reports on sales prices provided by the state, the average price of second-hand housing in October 2022 was €1,957 per square metre. This figure represents a decrease of -0.23% compared to last September, when the price per unit area was €1,962. Consequently, the increase compared to October 2021 was 5.62%, as the average price a year ago was €1,853 per square metre.
It was more than obvious that house prices will tend to moderate, but radical adjustments are not expected. We have to bear in mind that the situation of the residential market is very particular because property is at the centre of many people's life plan. However, the person who understands the market does agree that the rush for bricks and mortar will evaporate in the last quarter. In other words, the rush to buy a property before the rise in mortgage rates intensifies has all but dried up. On the other hand, we should note that the European Central Bank's third interest rate hike in October may not be the last, as the body is determined to control inflation.
Although the desire to buy a property will lose momentum due to the economic difficulties, we are convinced that prices will not experience striking price cuts. This is because supply continues to be lower than demand, despite the fact that some potential buyers will extend their tenancy period. As far as we can affirm, the rate of production of new construction is low, which transfers the weight to the second hand and prevents the reductions from materialising".
For yet another year, the Balearic Islands have proven to be one of the best places to invest in bricks and mortar with an increase of 13.79%, leading the regional increases.