Strong finish for 2022 property market

Estate agencies have enjoyed their biggest boom in half a generation with home sales soaring in 2022, according to the National Statistics Institute (INE). Growth in the residential property market was at its strongest in five years, and sales numbers highest in 15 years – even though a slowdown in December affected the total annual figures. In total, last year saw 649,494 homes sold – the highest number since 2007, when the last major property boom began – representing a year-on-year rise of 14.7 percent.
Enthusiasm in the market cooled considerably in December, when sales shrank by 21.3 percent on those of November. But the final month of the year is not typically one of the busiest in the property industry, given that the general public’s minds are largely occupied with the early-December bank holidays and the upcoming festive season.
This said, sharp interest rate rises – the greatest seen in nearly a decade – took their toll on buying and selling rates, as mortgage repayments have experienced a dramatic increase as a result.
A major slowdown was inevitable in 2020 with the pandemic bringing months of severe restrictions on movement and trade, including a complete ban on property viewings from March to May inclusive; the outcome of this was sales plummeting by 16.9 percent that year compared with 2019.
Re-opening of non-essential trade and gradual relaxing of Covid-linked restrictions would see home sales soar by an unprecedented 34.8 percent in 2021, following a very unusual year in which pent-up demand was finally released.
Yet sales did not stagnate completely in 2020 – around 420,000 residential properties still found new owners. The following year led to 565,485 homes sold, and 2022 would bring an increase of 84,009.
INE data show that the most recent annual total of 649,494 was last surpassed 15 years previously – by the end of 2007, at a time when property values had nearly doubled in under two years on average, sales had rocketed to around 775,000.
Other than the growth between 2020 and 2021 – which was not market-driven – the highest increase in percentage seen since the end of the last property price boom was in 2017, when a gradual post-recession rise reached a peak at 15.4 percent.
As well as the continual releasing of what property analysts have called ‘repressed demand’ during the pandemic, triggered by long lockdowns leading homeowners to reconsider where they really wanted to live, the main impulse behind the sharp rise in sales last year was a renewed attraction to pre-owned homes. Whilst new builds did register an increase in buyers – 2.6 percent overall – it was second-hand homes that led sales, accounting for nearly 82 percentof the almost 650,000 properties changing hands; up by 17.7 percent on 2021. Once again, the number of non-new residential properties sold was at its highest since 2007, totalling 532,459. New builds, however, also proved more popular than ever, with 117,035 of them bought in 2022 – the most since 2014.