In Q3, house price growth decelerated again, as it had in the previous three months. However, there was a strong recovery in the number of transactions.
The pace of growth in house prices has cooled down again in Q3, which could be attributed to pressure from the pandemic crisis. Between the beginning of July and the end of September, house prices grew 7.1%, according to figures released on Tuesday by the National Statistics Institute (INE), which represents a deceleration from 7.8% in Q2 and 10.3% in Q1.
“The HPI grew 0.5% between the 2nd and 3rd quarter of 2020 (0.8% in the 2nd quarter of 2020 and 1.2% in the 3rd quarter of 2019), the lowest quarterly increase since the 3rd quarter of 2015,” highlights INE.
This deceleration puts the pace of house price growth at its lowest level since 2016. The housing price index grew by 7.1% in Q3, with existing dwellings up 7.4% and new dwellings up 5.8% year-on-year. This was the second consecutive quarter in which prices slowed down.
However, there was a recovery in the number of transactions. In Q3, house sales rose 35.1% compared to Q2, now showing a year-on-year drop of only 1.5%. “The number of transactions between Q2 and Q3 2020 increased by 35.1%, which represents the highest increase in the series and follows the 23.3% reduction recorded in the Q2 2020, a period significantly influenced by the restrictions imposed in the context of the COVID-19 pandemic,” writes INE. In total, 45,136 dwellings were transacted between July and September this year.
“In the reference quarter, transacted dwellings accounted for approximately 6.8 billion euros, up 4.4% on the same period in 2019″, reveals the INE, noting that “August was the month with the highest growth in the value of sales, 7.3%, followed by September (4.5%) and July (2.1%).”