Spain's property portals register record usage despite real estate slump

Madrid

SPAIN'S property portals are betting that historically low interest rates and incoming European aid will boost real estate, but data shows sales diving, household debt rising and prices flatlining even after Spain's lockdown ended in June.

Fotocasa and Idealista, two of Spain's largest property portals, saw record user activity in the past three months. Fotocasa communications director Anais Lopez highlighted a 40 per cent year-on-year jump in traffic in June.

"All the real estate agencies we work with say they're seeing unprecedented interest in changing homes," he said, adding that Fotocasa's page visits and contact rates were well above pre-pandemic summer averages.

Idealista spokesman Benat del Coso said online mortgage brokerage requests over the summer were 20 per cent higher than normal. But Bank of Spain data shows house sales in free fall, despite intensified interest from Spaniards who dread spending a second confinement in the same residence and prefer spacious homes with gardens and balconies.

Nationwide, house sales plunged 43 per cent to 75,000 in the second quarter, the Bank of Spain said last week, with transactions in traditionally red-hot markets such as Madrid and Barcelona falling 20.2 per cent and 17.3 per cent respectively.

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Property prices tightened over the same period, said Spain's College of Registrars, with the average quarterly growth rate at 0.44 per cent - a substantial slowdown on past quarters - and some of the Registrars' methodologies even yielding small decreases.

Idealista noted prices dropping 0.1 per cent in Madrid and 1.1 per cent in Barcelona in August. Q2 rental prices sagged 0.2 per cent before falling 0.8 per cent in July, Fotocasa registered.

With financing hard to come by and mortgage indebtedness rising as cash-strapped homeowners seek liquidity, Spaniards are reluctant to sell property at "pandemic prices", while prospective buyers struggle to meet tougher lending requirements.

Spain, which is heavily dependent on tourism and hospitality, saw unemployment rise by 0.8 per cent in August, felling hopes of a V-shaped recovery after the novel coronavirus wiped out 20 per cent of its Q2 gross domestic product (GDP).

The prospect of recovery for Spain's real-estate sector has retreated since June despite the easing of prevention measures for the coronavirus, even as home prices surged in nearby countries like Britain. REUTERS