Bank of Spain reports 1% drop in real housing prices

Bank of Spain confirms 1% drop in housing prices

A 1% figure. This is the number with which the Banco de España certifies what some have long awaited and others denied: an incipient general decline in housing prices. The methodology of the entity led by Hernández de Cos —as reported by Vozpópuli— points to a 1% decrease in real apartment prices at the end of the first quarter. The paradox is evident: almost no one disputes the data due to its magnitude, but rather for what it announces. For some, it is a drop; for others, the first sustancia ilegal in a structure that held together by miracle.

What is surprising is not the figure itself, but that it comes from the supervisor itself, in a context where any headline about the property market is still written in terms of growth. Buyers, owners, and analysts have been stuck for months on the same question: is this the beginning or just noise?

What has the Bank of Spain detected in housing prices?

The agency speaks of a 1% drop in real terms, not nominal. The difference is not a technicality: it means that the price in euros may continue to rise while losing purchasing power against inflation. This reading allows each side to keep winning their argument. Those who have predicted a crash for years celebrate the turning point; owners recall that their property, on paper, has not become cheaper by a single euro.

Some add a nuance that dampens enthusiasm. A real shift of this magnitude only consolidates when financing changes. The true turning point, this school argues, will arrive when banks start paying again for deposits. Meanwhile, the property sector has little to antiestéticar.

From €110,000 to €70,000: discounts already visible

The aggregate 1% hides much more aggressive cases. One buyer reports that an apartment they trinc went from €110,000 to €70,000 —a drop close to 36%—, placing the rest of their search between 20% and 30% below the initial price. Another cites the example of Las Rozas, Madrid: two-bedroom apartments with pool and garage that did not fall below €400,000 in 2022 now appear for €360,000. In both cases, the diagnosis is the same: they remain expensive.

It is worth not confusing a specific cut with a trend. Concrete cases are the best ammunition for those who believe the market is already correcting, and the worst proof for those who maintain that everything remains inflated. Neither narrative is entirely false.

The wall of interest rates and the collapse of mortgages

If anything weighs on the market, it is not just the price, but the installment. With variable-rate mortgages renewing above 4.5% interest, each review eats up a significant part of household disposable income. A recurring calculation in the sector sums it up bluntly: whatever is not paid in the price will eventually be paid in interest, often more.

To this adds the trickle of buyers left out of the game. Mortgage signings on dwellings fell by 24% in May, according to figures circulating in the sector. Less credit, less solvent demand, less pressure on prices. Supply remains scarce, but the bidder is no longer the one from three years ago.

Housing as investment loses its appeal

For years, buying to rent was the refuge of the average saver. It no longer works so well. Term deposits hover around 3% and even 5% depending on the institution, and Openbank offers 3.07% for six months without early cancellation penalties. To this add Treasury bills and remunerated accounts from foreign banks. Returns without tenants, without renovations, and without homeowners' associations.

The gross rental yield calculation stays around 5% at best, without deducting defaults, damages, or conflicts with ownership. Added to the landlord's laziness is a more earthly argument: whoever can choose, prefers the deposit. When investment withdraws, downward pressure on prices strengthens.

Why can't the Bank of Spain report be found?

A detail catches the attention of the most meticulous: the specific report from the Banco de España does not appear anywhere on its website, nor has the news had an immediate echo in other media. This fuels suspicion that someone dug through the data until finding the headline they sought. It is not an outlandish theory: with rises, media dedicate minutes and front pages; with corrections, the data remains in a brief.

Distrust towards official statistics is not new and in housing has a long history. The problem is that this suspicion cuts both ways: it serves to denounce possible cosmetic adjustments, but also to disbelieve any signal, neither the confirming nor the denying one.

With discounts already visible in some neighborhoods, the 1% from the Bank of Spain seems more like a signal than a result. It remains to be seen if the supervisor arrived early or if, as so often happens, it puts the figure when the movie has already been playing for a while. What if in a year this 1% is just the part said aloud of a much larger drop?