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Costa's Housing Market Hits a Bumpy Road as Sales Plummet for the Third Consecutive Month

Hold on to your teacups and prepare for a tale of financial shenanigans! The real estate market in Malaga province has taken a wild turn, leaving potential buyers and sellers in a state of bewilderment. It seems that the Euribor, that sneaky interest rate that determines mortgage costs, has decided to do some fancy footwork, causing prices to skyrocket and sales contracts to dwindle like a soggy biscuit.


If we peek behind the curtain of statistics, we discover that the first quarter of 2023 has been nothing short of a rollercoaster ride. Sales have taken a nosedive, plummeting faster than a bumbling bird with no wings. For three consecutive months, the numbers have been in freefall, accompanied by a chorus of mortgage applications whispering their sad goodbyes.


The experts are pointing fingers at the mischievous Euribor and the sly rise in house prices for this topsy-turvy market. January, February, and March witnessed a gloomy decline in property transfers and mortgage loans. It's as if the housing market has caught a chill and is reaching for a blanket to huddle under. According to a report from Spain's national statistics institute (INE), January suffered a drop of 12.5%, February a slip of 5.8%, and poor March plummeted by a whopping 16.4%.


If we add up the numbers for the first quarter, we find that a staggering 9,314 homes have found new owners in the province. But alas, this figure pales in comparison to the same period last year, showcasing a heart-breaking decrease of 1,619 homes, equivalent to a 14.8% decline. It seems the Malaga province is feeling the brunt of this housing market shakedown more acutely than the rest of the country, which only witnessed a modest dip of 2.5%.


But hold onto your quaint cottage hats, my dear readers, for the chill in the air affects both new and second-hand housing. In the realm of new construction, sales have taken a nosedive of epic proportions, slumping by a mind-boggling 29% in Malaga province. Meanwhile, the second-hand housing market has been slightly less disastrous, with a decline of 10.4%. It's as if even the houses themselves have decided to join in on this topsy-turvy dance.


"The forecasts are coming true, my friends, and the market is taking a breather," exclaimed Ferran Font, the director of studies at the real estate portal Pisos.com. Font believes that the future of the market depends on a curious ensemble of factors: the rise of inflation, the whims of the European Central Bank's interest rate policy, the possible leaps and bounds of the Euribor, and, of course, the enigmatic new Housing Law that has everyone scratching their heads in uncertainty.


Oh, but do remember, my jolly comrades, that not too long ago, the Euribor was frolicking in negative territory, twirling its figurative moustache in delight. And now, oh dear, it teeters precariously close to 4%, a number that sends shivers down the spines of potential homeowners. This sharp rise in the mortgage interest rate (which, incidentally, serves as the reference for most mortgages in Spain) coincides with a rather inconvenient truth. While prices have soared to dizzying heights, wages have failed to keep up, leaving poor households clutching their purse strings with a look of despair.


You see, the meagre 2.78% rise in wages agreed upon in collective agreements until December 2022 simply pales in comparison to the rambunctious average inflation rate of 8.4% for the same year. It's as if the housing gods have conspired against us, unleashing a cruel prank that has left the people scratching their heads and wondering if they'll ever afford a cosy abode.

So, my friends, as we bid adieu to the first quarter of this tumultuous year, let us brace ourselves for further twists and turns in this housing market saga. Will the Euribor continue its dance of mischief? Will prices stabilize or continue their gravity-defying act? Only time will tell, as we hold our breath and hope for a pinch of luck in this whimsical world of real estate.

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