The Impact of Changes in Interest Rates
Over the last two years, the interest rate cycle has had a significant impact on people who have mortgages, both in the State and in the European Union. The credit restrictions implemented by the European Central Bank to control the inflationary spiral have led to significant increases in loan payments, especially in the case of the acquisition of real estate.
The Euribor and the Cost of Housing Financing
According to reports from early 2024, it is estimated that the increases in the Euribor, the European mortgage benchmark, have increased the total cost of financing for regular housing by approximately 8,000 euros in some cases. This has generated great expectation among consumers, who eagerly await the decisions of the European Central Bank at each monetary policy meeting.
Effects of the Decline in Interest Rates
Francesc Quintana, CEO and founder of the company specialized in real estate intermediation Vivendex, pointed out that the immediate effects of the decline in rates on mortgages will not be very noticeable. The banking system’s forecasts had already contemplated a lightening of the monetary burden on loans, so the offers and revaluations would have been calculated according to the most recent figures, standing at 4.25% in regular financing operations.
The Rising Price of Residential Acquisitions and Rentals
The increase in the cost of residential acquisitions and rentals is not solely attributed to global monetary and financial indicators, according to Quintana. This phenomenon is mainly due to supply and demand. Despite the decline in the mortgage benchmark, housing prices will continue to rise due to the lack of supply. Limited supply is the determining factor that currently keeps prices tight.
The Role of the Available Housing Stock
Quintana highlights that the available housing stock will be the factor that defines both costs and operational flows. After two years of decline, changes in the number of transactions and possible growth are expected to be observed in the second quarter.