Buy or sell house: better now or wait until 2023?

The current economic context, characterised by high inflation and rising interest rates, is influencing several sectors, notably real estate. And that's why both buyers and real estate sellers wonder whether or not this is a good time to do business, or whether it is preferable to wait until 2023. Here's what some experts think.

In general, and when buying a house, most consultants believe that despite current circumstances, this is a good time. Francisco Sierra, director general of Casavo in Spain and Portugal, says that if we look at the historical correlation between Euribor and sales, the rise in interest rates does not have much impact on the number of transactions.

"We believe that 2022 will continue to be a good year to buy a property, as the measures promoted by the ECB to contain inflation will be offset by increased activity by private and institutional investors." It specifies that, although, as some reports point out, 2023 is a year marked by a 15% drop in sales, the housing market will stabilize, "since the impact of the rate increase will have an impact in the short term, improving the outlook for the future."

Jesús Duque, vice-president of Alfa Inmobiliaria, said that in the next six months the economy could cool down as a result of the War in Ukraine and all the events it has generated in the world economy, such as the ECB's decision to raise interest rates – which are expected to continue to rise in the coming months. For the expert, those who want to buy should realistically assess whether a future increase in housing credit can have a very negative impact on their financial situation. And evaluate which of the two options you prefer: whether you buy at a higher price and lower interest rates or vice versa.

Ernesto Ferrer-Bonsoms, Director of Real Estate at Intrum Spain and business director of Solvia, explains that if you want to buy, the best time is now if we need financing, as interest rates should continue to rise in the coming months. "The rise in interest rates by the European Central Bank will affect much of consumer loans, including many mortgages. Moreover, due to the lack of supply, prices are expected to continue to grow, albeit more moderately than in recent times."

If I want to sell, is it better now or later?
Jesús Duque explains that in the coming months we may see more difficulties in accessing housing credit, higher rates and in some cases greater doubts about the labor market. "My opinion is that anyone who can sell now, and can't or doesn't want to wait a year or two to sell, should do it now."

When analyzing a sale, since Casavo, they remember that we are at a particularly favorable time for the sale of real estate, because interest rate increases moderately boost the number of buy-and-sell transactions, something they believe will happen in the third quarter of the year.

For 2023, Casavo predicts an improvement in the sustainability of the real estate sector, motivated by the measures currently promoted to contain inflation, the effects of which we will begin to observe in the medium or long term. "That's why when we talk about the best time to sell a house, we should point out that we are at a particularly favorable time for this, which will remain throughout 2023 as a result of the current economic context, which drives sales in the face of increased credit, the fight against inflation and the security of property as an investment."

What will happen in 2023?
At Alfa Inmobiliaria, its vice president believes that by 2023 there are likely to be better deals and lower prices to buy, but also many families will have more difficulty accessing housing credit, and interest will certainly be higher. "This price fall can be for a short period of time," he says.

He recommends that, especially in the case of those people who are thinking of resorting to fixed-rate real estate financing, it is better to buy now, although it is probably possible to find slightly lower prices in a few months.

According to Casavo's analysis, rising house prices due to the influence of inflation will be offset by measures promoted by the European institutions to combat this economic environment, giving rise to a very positive scenario in the medium and long term. "In view of market movements, we anticipate that the rise in interest rates will be accompanied by a slight increase in sales, as housing becomes a "safe haven" in the face of uncertainty," he said.

The expert considers, however, that the development and growth of the number of sales operations will be accompanied by a reduction in supply in early 2023. However, they consider that they are usual market movements that contribute to improving the dynamics that ensure the sustainability of the industry.

Source: Idealista.pt