The real estate sector will maintain its dynamism in 2022 despite inflationary and geopolitical tensions
The housing market has shown great resilience in the last year, in a context of “international uncertainty and deterioration”,
The real estate sector will maintain the dynamism that began in 2021, growing at a “stable rate” and “away from new bubbles”, despite inflationary and geopolitical tensions.
«The intense internal demand in the residential market and the gradual return of the foreign buyer will keep Spanish real estate as a very attractive sector for investment.
Consulting firms have highlighted that the housing market has shown great resilience in the last year, in a context of “international uncertainty and deterioration”. “The sector has had a more dynamic behavior than expected”
Among the reasons for the recovery, it is worth highlighting the savings of families, which in the 2020-2021 period increased by 75,000 million euros, and the interest in changing homes, “in search of larger spaces and outdoor areas”.
However, the development of the conflict in Ukraine could affect the real estate market. “In the medium term, the boomerang effect of the sanctions on Russia is going to cause a slowdown in demand in the residential market.”
This situation will prevent the generation of a real estate bubble in 2024. “The lower increase in prices and sales, together with a more rapid increase in the ECB’s main reference interest rate, will allow a longer expansionary stage, if inflation returns to his usual level.
Financing worsens and supply drops
From the consultant they have considered that the new construction work will gain prominence again in the coming months, although they have appreciated an imbalance between the supply and demand of these properties, which will result in an increase in prices.
It has been calculated that this year a maximum of 145,000 homes will start, a supply “completely insufficient” for the volume of demand and “one of the main problems” of the residential market today.
“It is foreseeable that new housing will rise again more than second-hand depending on the evolution of inflation and interest rates.” In addition, the upward trend of the Euribor, which despite everything is still negative, will worsen financing conditions.
In 2021, 61% of home buyers had chosen to finance the operation, compared to 39% who used their own resources, a behavior that could change this year.
The increase in prices has already been seen in some cities where the increase has reached double digits in 2021; properties sold are up 12%.
In addition, in the last year, price increases have occurred at two speeds, with differences between the center of large cities and their metropolitan areas.
Likewise, in these cities a return of international clients has been appreciated, who already monopolize 40% of the managed rental operations, with the French in the lead.