In the first months of 2020, house prices were already slowing down gently since June 2019 when the new Mortgage Law came out, however we did not notice an abrupt decline in sales until March 2020 with the confinement and mobility restrictions that came afterwards.
After the period of confinement and the halt in sales, since June 2020 we have seen a strong increase in sales of villas and houses with swimming pool that leads us to think that despite the current economic situation generated by the effects of the pandemic, the demand in the area is increasing and sustains the prices of real estate, which if they tend to fall throughout Madrid, however, in areas such as La Moraleja, El Encinar de los Reyes and Ciudalcampo maintain the type.
We are aware that with the historic slump in the economy in 2020 of up to 11% and with expectations of recovery of 6% for the year 2021, we will not be left out of the general price decline for the next 2021, but in the end it will depend as always on the ability of demand to absorb the real estate supply over the next year, knowing that we start from a fairly limited supply currently in terms of homes for sale is concerned.
Rental housing in 2020 has paradoxically suffered much more than for-sale housing. As housing in the northern part of Madrid is destined for expatriate families with high professional standards, and as the number of expatriate personnel sent by companies has been drastically reduced, the supply of rental housing is enormous and prices are adjusting considerably. We estimate that by mid-2021, with the pandemic under control and with the effects of the vaccine, the rental market will be recovering, provided that there are no new legislative regulations aimed at artificially limiting prices.
We have managed to save a very difficult year full of difficulties but with the illusion of having facilitated the way for our clients in terms of housing decisions.