The Spanish Ministry of Housing has recently released the data for the number of home sales in the first quarter showing that the market kept the same record pace we saw during 2021. In fact, that was also our feeling during the first six months of the year, even after the start of the Ukrainian war. Now we are hearing all these comments about a recession coming in autumn but, right now, it´s not what the market shows.
Going back to the data and Chart 1 for Marbella, we can see that the number of transactions closed is about the same as the ones closed in 2004, the record year for Marbella, and the highest in the last ten years. Considering that 2021 almost beat the historical number of home sales closed in Marbella, the increase of the first quarter of 2022 versus the same quarter of 2021 is an outstanding 64%. We had that same feeling of activity during the second quarter that, I presume, will be shown on the numbers when the Ministry publishes them in about two months.
GRÁFICO 2 - NÚMERO DE VIVIENDAS VENDIDAS EN BEHAHAVÍS 2º TRIMESTRE 2021
Regarding Benahavis and the information on Chart 2, the numbers are similar to the ones shown for Marbella, with the number of closed transactions almost reaching the historical maximums for Benahavis and with an increase of 79% compared to the same first quarter of 2021.
In summary, lots of sales, inventory going down due to record numbers on home sales and prices going up also caused by the decrease of properties for sale. Really, economics' law, low offer and high demand pushes prices up.
The key question is: is the market going to stay this active for the rest of the year? It is difficult to say when the governments and banks are talking about a recession coming in the second half of this year. There is so much talking on the topic that some buyers will think twice about buying, considering that they may get a better price if the market falls. Also, developers are slowing down to be able to observe the market after the summer and see the risk they may take. In any case, I think Marbella and Benahavis markets are going to do well because the conditions that pushed the market are still there and, although we may see less buyers, the inventory is low and we do not expect lots of bank repos or developer’s bankruptcies as before, as they learnt the lesson in 2008, so prices may stay more or less stable, but with less transactions.