Home sales grow by 51% in October and record their highest level since 2007

Home sales increased by 51.3% year-on-year last October and accumulated a total of 69,418 transactions. This is the largest increase since August 2021 and the highest number of transactions since May 2007, when more than 75,000 transactions were made.

The data for October published this past Monday by the National Institute of Statistics (INE) confirm that home sales have had four consecutive months of year-on-year increases after rising by 19% and 0.9% in July and August, respectively, and soaring by 41% in September.

New home sales rose by 83.4% year-on-year with 16,224 transactions (their biggest increase since May 2021 and their highest figure since February 2013) and second-hand housing transactions increased by 43.6%, an increase not seen since September 2021 with a total of 53,194 transactions, the highest since the start of the series in 2007.

In a month-on-month rate (October over September 2024), home sales soared by 12.2% and from January to October, they have increased by 7.5% year-on-year, with increases of 18.9% in the case of new homes and 4.8% in the case of homes that were already used.

Christian Boesen, director of homes-abroad.com believes that the rise is mainly because of cheaper financing and the fear that prices will continue to grow strongly, but point out that "the supply problem that the market is suffering is by no means resolved, and this rally in sales at the end of 2024 will only make it worse, putting even more pressure on prices during the coming months."

On the other hand, he says that the progress in sales in October allows us to project a closing of 2024 "with figures close to 2022, a record year", since active demand and moderation in rates are pushing the market "clearly upwards", especially in large areas.

The closing of real estate sales will be above 630,000 operations by the end of 2024 in total.

Between the months of September and October, the sales rate soared by 12.2% and these figures are "very good news", since the purchase of homes is a "key" indicator to analyse the financial health of a country and the solvency of its households, so we expect the sales to continue with this positive trend in the coming months, although with less significant growth.

These very large variations indicate the beginning of a new boom in home sales. After the change in the mortgage cycle driven by the de-escalation of interest rates, a season of dynamism in home acquisition begins, in which factors such as optimism and buyer confidence in the market, added to an increase in the household savings rate and more attractive mortgage conditions with a falling Euribor, will increase home purchases in 2024 and 2025.

According to Christian Boesen, sales are in a "golden age" since up to October 537,283 sales have been signed, "which means that 2024 has already improved the volume of the year 2023 and is currently only 2.65% of sales (up to October) in 2022.

So as the saying goes: Dont wait to buy real estate – buy real estate and wait.