The new real estate reality in Spain, which is in tune with that of Europe, will leave a third less activity in the market. This is what CBRE, the world’s largest real estate consultancy, forecasts, which estimates that sales will fall by 33% this year compared to 2022. Even so, it is not a debacle, since last year was extraordinary for the purchase of houses, the best year since 2007. But “the prospects are for adjustment”, the head of the CBRE Iberia research department, Miriam Goicoechea, made it clear this Monday, “and the outstanding fact is that we are not going to reach 500,000 homes sold”.
The panorama is completed with price stability (these will grow by 0.1%, according to the report on trends in the residential sector that the consulting firm has released this Monday), although in both cases better behavior can be expected from the segment of new work. Brand new houses, favored by the imbalance between demand and supply — more than 200,000 new homes are created in Spain every year, while around 100,000 houses are built, Goicoechea recalled — will become around 3% more expensive .
The culprit of the cycle change has been clear for a long time. “Within our market, the element that is influencing the most is the rise in interest rates,” said Javier Kindelán, vice president of CBRE Spain. As a consequence of the rise in inflation (the official interest rates set by the European Central Bank were 0% a year ago, and 3.75% now) and also the loss of purchasing power (inflation rose to 4, 1% in April and it has been above 2% for two years now, buying a house will be more difficult this year. The report raises the effort rate to 38.8%, above the percentage of income that is considered reasonable to allocate to the payment of the house (between 30% and 35% maximum, according to various organizations).
Although the new macroeconomic conditions also affect professional investors, who see that financing is also more expensive for them and they need more profitability in operations so that they pay off, the truth is that this effect has hardly been noticed in the first quarter of the year . Investment in the Living sector (in which CBRE includes all the properties that are used to live, from rental apartments to student residences) reached 1,219 million up to March. This represents 42% of all real estate investment that Spain had, since unlike other sectors such as offices or commercial assets, investors here did not step on the brakes. Although Kindelán has qualified that the figure has been boosted by several large-scale operations, which is unusual: “At a European level, all countries are accusing that there is less investment activity in their markets,” he explained, “in Spain That is not different, but it has happened to a lesser extent.”
The bulk of the volume invested, 805 million, corresponded to build-to-rent (build to rent). These are new developments that an investor remains in block to allocate all the apartments to rent. CBRE also highlights the boost, 109 million, experienced by the public sector as an investor. This groups Public Administrations that buy or order the construction of buildings to allocate them to affordable housing or for social purposes.
In fact, affordable housing is a new trend in residential investment. The consultancy divides it between regulated (on land with official protection) and unregulated, and estimates that both have monopolized 41% of the total money invested in residential. Added to this are trends that have been going on for years, such as the increase in student residences (Spain is light years ahead of other European countries in volume of beds). These monopolized an investment of 160 million between January and March, due to three transactions in the provinces of Valencia and Barcelona. In the long term, CBRE points to the growth of branded homes (houses sponsored by a brand associated with luxury) or senior homes, houses prepared for the elderly and called to gain space in a country with an older population, although The report highlights that this sector “did not generate transactional activity in the first quarter.”
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