Discrepancy in housing sales data shakes up the Spanish real estate market.

The Spanish real estate market is at a crossroads. The divergence between the home sales data provided by the National Statistics Institute (INE) and the figures compiled by the General Council of Notaries raises a question that piques the interest of economists, sector agents, and potential buyers. While the INE reports a decline in home sales of 4.49% in the first half of 2024, notaries assert the opposite, indicating an increase of 5.86% in the same period. This discrepancy is particularly evident in the figures for June, where the INE reports a year-on-year decline of 6.12% in sales, while notaries indicate an increase of 3.9%. On the other hand, housing prices continue their unstoppable rise. According to the latest data from the INE, housing prices have grown by 7.8% in the second quarter of 2024 compared to the previous year, marking the largest increase since 2002. This growth is particularly driven by new housing, which has seen a remarkable year-on-year increase of 11.2%. This phenomenon has led to significant pressure on the prices of the second-hand housing market, which has also recorded a more moderate increase of 7.3%. It is evident that the scarcity of new real estate developments is influencing this upward price trend. Autonomous communities have not escaped this phenomenon, with particularly significant price increases in Navarra, Aragón, and Andalucía. However, the lingering question is whether this situation will translate into a real increase in the volume of real estate transactions or whether, conversely, the market will be constrained by the rising cost of mortgage credit, a result of the European Central Bank's policies. The disconnect between the INE's figures and those of the General Council of Notaries can be attributed to the way data is collected. While the INE bases its statistics on the moment when sales are registered in the Property Registries, notaries collect information at the moment transactions are formalized before them. This time lag can extend from two to three months, especially in cases involving mortgages, where bureaucratic procedures can prolong the process. Therefore, the different data sources are not strictly comparable. While notarial statistics provide an almost real-time representation of the market, the INE's statistics may reflect more outdated figures. Additionally, the complexity of the buying and selling process, which can be affected by various administrative and management factors, contributes to this disparity in figures. Professor José María Montalvo also adds other factors that may influence this discrepancy. The presence of multiple notaries in the same locality compared to a single registrar could lead to bottlenecks in the registration of transactions. Similarly, some self-promotions may choose not to register their properties in the Registry to continue being taxed as land, adding another layer of complexity to the situation. Real estate registry statistics are a fundamental tool for understanding market dynamics, as they encompass all transactions of buying and selling real estate, including homes, commercial premises, and industrial warehouses. Despite this, the lack of alignment in figures between the INE and other entities, such as the Ministry of Transport, raises questions about the accuracy of the data and how it is processed and analyzed. In this context, the future evolution of the real estate market will largely depend on the trajectory of interest rates. With the possibility of a reduction in rates by the European Central Bank, there is hope that this could incentivize sales in the coming months. However, the continued rise in prices could limit the volume of transactions, leading to a situation of stagnation or even deceleration in the market. Therefore, the housing market in Spain is in a transitional phase, marked by rising prices that coexist with contradictory signals regarding sales activity. With the next INE report scheduled for September 26, it will be crucial to observe how these data unfold and whether they align with the projections of notaries and other sector players. Thus, we are invited to reflect on the future of the real estate market in an environment marked by economic uncertainty and political decisions that can shape this vital sector of the Spanish economy.