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The labor cost of real estate activities increased by 21%

In the second quarter of 2022, the labor cost for each worker in real estate activities was 3,050.11 euros per month, 12% more than the period of the previous year, and 4% more compared to the first quarter of the year, according to published data from the Quarterly Labor Cost Survey (Etcl) carried out by the National Institute of Statistics (INE).

The segment ratifies the upward trend registered in the last quarter of 2021, in which it registered a rise of 3.5%, and which continued in the first three months of 2022, 11% more compared to the same period of the previous year. Of the labor cost of workers in real estate activities in the second quarter, 2,250.75 euros correspond to the total salary cost, while 1,829.38 euros correspond to the ordinary salary cost.

On the other hand, 799.36 euros of the expense correspond to costs for mandatory contributions. The upward trend in real estate activities also affects the other real estate subsectors. The construction of buildings recorded a labor cost of 2,964.05 euros in June, which represents an increase of 5% compared to the same period in 2021. In the specialized construction segment, the growth in labor cost has climbed 6% annually, reaching an average labor cost of 2,954.16 euros.

For its part, rental activities have registered an interannual increase of 8%, placing the labor cost at 2,785.41 euros per worker. Rental activities is the only sub-segment in which labor costs fell compared to the first three months of the year, posting a 2% drop.

The rest of the subsectors recorded increases compared to the previous quarter, highlighting the 14% rise in specialized construction activities and 11% in building construction.

In the general statistics, the labor cost of Spanish companies stood at 2,871.64 euros per worker and month in the second quarter, with an upward variation of 3.8% compared to the same period in 2021. Regarding the wage cost per worker and month, this increased by 4.3% and reached 2,153.88 euros on average. For its part, other costs grew by 2.2%, standing at 717.76 euros per worker per month. Source: Ejeprime

Source: Ejeprime

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The ‘sprint’ in the purchase of houses: an option to flee from the rise in mortgages?

Sprint

The ‘sprint’ in the purchase of houses has gained fame among buyers during the first four months of this year, and this is because many have seen it as a viable alternative to escape the rise in mortgages.

Added to the rise in mortgages, which was felt in May and which will intensify in the coming months, is another problem: the lack of homes for sale. It is estimated that the current ‘stock’ is barely 2.5% of the total park and many of them in areas that are not attractive for demand.

Projects held back by rising costs

In the short term, the problem does not seem to be solved as a result of rising construction costs, which is holding back many projects. All in all, it is estimated that in the coming months home sales will fluctuate between 1,800 and 2,000 per month, at levels similar to April, when 1,959 operations were closed.

The previous months, due to the ‘sprint’ of mortgage flight, the figures were higher: 2,032 in January, 2,125 in February and 2,332 in March. In total, 8,448 homes were sold in the Canary Islands in the four-month period, 13% more than in 2019, when there were 7,476.

In the Canary Islands, foreign demand must be added to residential demand, which on average accounts for 30% of operations. The foreigners returned with force in 2021, after the covid pandemic, and now they maintain operations. Regarding the rate hike, Bello points out that it is still possible to find mortgages on the market at a good price, at 1.75% or 1.80% for thirty years.

The rates so low to date “were not real”

Bello’s opinion indicates that the real estate market in the islands is entering a stage of cooling and stabilization, which is shared by different experts in the sector. From the real estate portal, the Idealista, its spokesman, Francisco Iñareta, explains that in the coming months there could even be a small drop in operations due to the rise in financing, economic uncertainty, inflation and the low ‘stock’ of houses .

Source: Canaria7