Buying and selling of housing in Spain has reached in September 2021 a level not seen in the last 161 months. According to the National Institute of Statistics (INE), the real estate market registers the best month since April 2008 (53,410 transactions). Purchase intentions, paralyzed by the pandemic, are being realized now and are creating new demand. Listing the features of the real estate market in Spain, it is necessary to mention the recovery of the economy and the change in real estate prices in Spain after the crisis: over the past four years, home sales have exceeded the figures for 2019.
More than 53,000 transactions were concluded in September this year, which is 40.6% more than a year earlier.
In terms of real estate typology, the latest data from the National Institute of Statistics (INE) show that the recovery in transactions is mostly in secondary housing transactions, which make up the bulk of the market. Secondary housing accounts for 42,477 sales transactions.
UNEVEN GROWTH ACROSS AUTONOMOUS COMMUNITIES
The September figures show uneven growth by autonomous communities. Extremadura is the only province where transactions were lower than a year earlier (-2.4%), and Asturias showed a rather low year-on-year growth (1.4%). In all other territories the number of sales transactions grows with varying strength: Murcia, Castilla-La Mancha and Madrid recorded an increase of 20%; in the Basque Country, Catalonia and Andalusia – about 55%. Navarra particularly stands out: there were sold almost 70% more properties than in September 2020.
Four major regions of the country dominate the number of sales in September 2021 (more than 6 out of 10 transactions occurred in these communities): in 1st place is Andalusia (11,843 transactions), in 2nd place is Catalonia (8,396), in 3rd place is Valencia (7,617), in 4th place is Madrid (7,071).
REAL ESTATE IN SPAIN IN 2022 AND MARKET PROSPECTS from Oldypak LP
The year 2022 is expected to develop against the backdrop of economic recovery, with supply problems and high energy prices in the first half of the year. Inflation and its potential impact on consumer confidence should also be watched closely. In the real estate sector, demand will remain strong amid low interest rates, while supply may grow at a slower pace. This is due to labor shortages in the sector and the long licensing periods that developers already faced in the years leading up to the pandemic. All of this could lead to higher housing prices, especially in the new construction segment. European funds will give impetus to public-private cooperation, along with urban regeneration and revitalization projects. With their help the energy efficiency of the real estate market in Spain will be improved. It is also expected that during 2022 the text of a future law on housing will also be developed, which will set the framework for the development of the sector in the coming years.
HOW DOES THE RECOVERY OF THE REAL ESTATE SECTOR AFFECT THE REST OF ECONOMIC ACTIVITY?
The real estate sector is the driving force behind economic activity, because housing construction has a multiplier effect on direct and indirect employment. We are not just talking about construction workers, but also material suppliers, architects, engineers, transporters, notaries. Every house construction in Spain creates jobs. Not to mention the flow of revenues to the state treasury related to taxes. These two areas are developing at the same time: if the economy is prospering, the real estate sector is developing. In 2008, real estate was at the “epicenter” and was part of the problem. The real estate sector is now strong, healthy and balanced, showing strength and resilience, thus playing a key role. Real estate should be an important part of the economy, as one of the big engines that help its economy.
NEW HOUSING PRICES
We are in a situation where demand for housing is recovering faster than supply, which is experiencing price strain in the new construction segment. In more dynamic markets, this shortage of supply and the resulting upward change in property prices in Spain may intensify in the coming months, as the pandemic has slowed the start of new construction projects. In any case, we understand that the upturns that may occur will be moderate. Another aspect to keep a close eye on is the increase in the cost of some of the raw materials that have been affecting construction costs in recent months. Fortunately, we are already seeing signs of a decrease in the price of some commodities.