2023-07-22 04:02:57
Real estate operations are in a moment of paralysis in Castellonwhich the sector trusts to be temporary, although for the moment no one ventures to make forecasts in the medium and long term. The main cause is in the increase in the price of money, which has led to an increase in mortgage costs. The reference indicator to set the interest rates on these credits, the Euribor is above 4%, which makes expenses more expensive for those who have a variable interest and slows down the opportunities of those who need to finance the purchase of a home.
This panorama is reflected with the operations of the Month of May. According to data from the National Institute of Statistics, during that period 360 mortgages, which represents a decrease of 33% compared to the same month of the previous year.
You have to go back five years, that of 2018, to see a lower May. At that time, the Castellón real estate market was still recovering from the effects of the construction crisis.
Worse result than in the national group
The fall has also been strong in the national group, but not as pronounced as in the province. The numbers are also negative in the cumulative of the first five months since it is 2023. There are 2,048 signed mortgages in Castellón, which means a decrease of 11.69% compared to the same stretch last year.
Two out of three homes in Castellón are bought in cash due to the rise in mortgages
It is the property agents who know the day to day of this reality. Juan Carlos Rodríguez, from Área Vivendi Castellón, explains that they live “a roller coaster from the covid». First, with the restrictions to see homes during confinement. Then there was a rebound by those who decided to move to a larger and more comfortable home, and now you are suffering from inflation and the war in Ukraine.
Waiting
From the College of Registrars it was revealed that, from January to May, two out of three home sales were closed with cash payment in Castellón, thus giving up the mortgage formula to finance these operations. Most of these people are people with liquidity, who take advantage of opportunities in the market to later allocate the properties for rental or vacation use.
The cancellation of mortgages shoots up in Castellón to avoid the rise in rates
Rodríguez states that this situation “has stopped in the last few weeks, waiting for events with the elections on Sunday. For this reason, real estate companies hope that investors will be encouraged, and that mortgage interest rates will go down.
The average amount of the credits drops to 30,000 euros
In recent times fewer mortgages are requested, and they are also closed for a lower amount. In May, the average for Castellón was 30,397 euros, an amount much lower than the 46,745 registered just a year ago. It must be taken into account that current loans, for the same amount requested from the bank, are more expensive for customers, whether they are of variable interest or if they opt for a fixed rate, which has also increased as the price of money has become more expensive from the European Central Bank. In parallel, the interest of families with a mortgage to repay their loans to the maximum is also growing, as was already reflected in the first quarter of the year in Castellón.
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