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Decline in home purchases in the Basque Country: prices drop and prospect of collapse in the coming months

Jesus Carames

May 4, 2023 | 6:40 p.m.

Prices fell 2,6% due to the rise in interest rates to curb inflation and the increase in the cost of financing

La sale of homes in Euskadi has experienced a significant drop, exceeding the state average in comparison with Navarra. The real estate market in the region is affected by high interest rates and reduced bank credit, which could result in a strong crash in the next six months.

Alarming data on home sales in the Basque Country

According to the General Council of Notaries, in March of this year there were 2598 home sales in the Basque Country, while in the same period of 2022, 2830 transactions were recorded. The drop in the sale of homes has been of 22,4% in the Basque Autonomous Community, in contrast to the decrease of 11,7% at the state level.

Declining Home Loans

As regards mortgage loans, in March, of the total sales carried out in the Basque Country, the 88,6% They went with a mortgage. The number of contracts signed in Euskadi (94,2% of the total) compared to 69,8% of mortgages contracted in Navarra is noteworthy.

Factors influencing the drop in home sales

La rise in interest rates to curb inflation and the increase in the cost of financing have influenced the fall in the sale of homes in the Basque Country. Besides, the reduction of bank credit has limited the possibilities of acquiring a home for many citizens.

Worrying outlook for the coming months

The current situation of the real estate market in the Basque Country is worrisome, with a drop in the purchase of homes and a collapse in the next six months. The Basque Government and financial institutions must take measures to reverse this situation, encouraging investment and facilitating access to housing.

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