The price of housing moderates the increases to 1.3% while the Euribor shoots up to 2.2%

Moderation is gradually settling in the housing market and now it is the prices that show that the

after the coronavirus is cooling down.

The average cost of housing

in the third quarter, 1.3% more than in the previous quarter which, however, is far from the average of over 2% recorded consecutively in the three quarters previous.

The data collected by the appraisal firm

reflects the impact that inflation and the increase in rates are already beginning to have on the activity of the real estate sector in Spain.

"The persistent inflation at high levels that erodes the purchasing power of households, together with the drop in the consumer confidence index given the prospects of slowing economic growth and the increase in interest rates that makes mortgages more expensive, can act as elements slowing down the demand for housing in the coming months", points out

, director of the company's Studies Service.

Along with lower demand, Tinsa considers that supply will also remain at limited levels due to the shortage of specialized labor and the uncertainty generated by the inflationary scenario.

This combined moderation of demand and supply has opposing effects on residential prices, which as a whole could result in more contained growth rates than those observed in previous quarters.

In fact, despite this containment in the third quarter, the price per square meter was paid between July and September 8.5% more expensive than in the same period of the previous year, standing 32.3% above the minimum levels registered in the same period of 2015 and 20.7% below the maximum of the end of 2007.

"As we anticipated in previous reports, the number of new mortgages for home purchase begins to reflect a tightening of the risk granting criteria of financial entities in the face of the effects that inflation and the change in the ECB's monetary policy may have in economic growth and household debt capacity," says Arias.

Despite this, "there are no alerts due to the existence of excessive financial burdens in the system, since the post-crisis period has been characterized by solvent demand, with prudent debt levels and a higher proportion of fixed-rate mortgages ", Add.

The preponderance of fixed-rate housing loans is especially relevant at a time when the

(the index to which most variable mortgages in Spain are referenced) continues its unstoppable ascent ride.

The indicator is expected to close the month of September with a monthly average of around 2.24%, the highest since January 2009. The rise is meteoric if one takes into account that it marked a historic low in December and that the year began in negative ground.

Those mortgaged at a variable rate -which account for 75% of the total- who have to review their contracts in the coming weeks will see the installments they must assume skyrocket.

According to the financial comparator HelpMyCash.com, this increase will be almost 200 euros per month on average, which is just under 2,400 euros per year.

For an average variable mortgage of 150,000 euros, with a term of 25 years and an interest rate of Euribor plus 1%, with a semi-annual review, the installments of this loan will rise by practically 181 euros per month (almost 1,085 euros more per semester).

And with an annual update, the monthly payments will increase by about 198 euros (about 2,372 euros more per year).

effort for the mortgage

Tinsa estimates that Spaniards allocate 30.4% of their disposable income to the payment of the first annual installment of the mortgage, while the bulk of the Spanish provinces present a moderate level of effort, less than 35%.

This purchase effort amounts to 53.2% in the Balearic Islands, 41.3% in Malaga and 38.5% in Madrid.

On the opposite side is Lleida, where citizens allocate 17.4% of their disposable income to that first annual mortgage payment, followed by Teruel, with 18.8%, and Álava, with 18.9%.

In Barcelona

of a mortgage for 80% of the value of the home, and in Madrid, the rate is slightly reduced to 44.4%.

The highest monthly mortgage installments are located in the Balearic Islands, with 999 euros, and in the Community of Madrid, with 884 euros.

On the contrary, the lowest monthly payments are located in Lugo, Jaén and Cuenca and are less than 370 euros.

Rises in all Autonomous Communities

Returning to prices, by Autonomous Community, all accumulated generalized year-on-year growth for the fourth consecutive quarter, although less intense than in previous quarters.

Aragón leads the increases, with an increase in housing prices of 12.7% in annual rates, followed by Madrid (9.5%) and Cantabria (9.2%).

For their part, in the quarterly variations, most of the communities reflect price increases of between 0.1% and 2.5%, except in Aragón, where they rose by 5.4%, and Cantabria, with 3.3%.

In the comparison with the historical maximums of 2007, the Balearic Islands is the community that has reduced the gap the most, with housing prices 3.9% below that reference, while Castilla-La Mancha is the community that shows more distance, with housing 42.4% below those pre-crisis maximums.

By provinces, the most intense growth in the price of new and used housing is above 9% with Zaragoza, Granada, Soria and Madrid, without registering provinces with negative variations compared to a year ago, as reported by Tinsa.

Madrid and Barcelona moderate the upward trend, with a quarterly increase of 0.5% in Madrid, compared to 2.3% registered in the second quarter, while in Barcelona the rebound in the third quarter was 1.2% compared to to the previous 2.4%.

In the analysis by capital, the same trend is repeated, with a moderation in housing prices throughout the third quarter, with increases of between 0.1% and 2.5%.

A total of 11 capitals show price decreases in the current quarter and 17 are in the environment of a flat evolution.

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