Spain Real Estate EN

07/12/2023

ALICANTE WAS THE LEADER AMONG THE PROVINCES OF SPAIN IN THE SALE OF HOUSING

The recovery of the real estate sector after the pandemic in Alicante has passed with lightning speed. Sales turned out to be so good that the province became the leader among the provinces of Spain in sales of residential real estate in 2022. About 60,000 transactions were concluded, which was the highest figure since 2007.

The main buyers were foreigners, by and large Europeans. The focus is on the secondary residential market. Prices have increased both in the capital Alicante and in the tourist areas of the province. Among the negative aspects, there was practically no new construction. To some extent, this was and remains due to the lack of free land for construction.

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The latest property news on Spain-Real.Estate. Alicante was the leader among the provinces of Spain in the sale of housing in 2022. All about properties in Spain!

09/08/2023

HOW LONG WILL IT TAKE TO SELL A HOUSE IN SPAIN IN 2023?

How long does it take to sell an apartment in Spain? The answer to this question depends on several circumstances: price, location, condition, spending money and effort on marketing, and so on. Regardless of the quality and attractiveness of the object, its implementation on the market will take some time.

According to the Idealista real estate portal, up to 20% of residential properties in Spain are sold in less than a week, up to 15% — from a week to a month, up to 21% — from a month to three, up to 29% — from three months to a year and only 14% — more than a year.

IN WHICH AREAS OF THE COUNTRY ARE HOUSES SELLING THE FASTEST

Most real estate transactions take place in provincial capitals. They also have the highest sales rates. Let's list the cities in which the largest number of objects are sold per week:

• Granada (34% of all residential properties put on the market);
• Pontevedra (31%);
• Salamanca (30%);
• Tarragona (29%);
• Santa Cruz de Tenerife (28%);
• Lleida (27%);
• Albacete (27%);
• Almeria (25%);
• Girona (24%);
• San Sebastian (24%);
• Guadalajara (23%);
• Malaga (23%).

Separately, we note the two largest and most important cities in the country: the capital Madrid and Barcelona, the capital of Catalonia.

THE PERIOD OF SALE OF APARTMENTS IN MADRID

Madrid is one of the largest real estate markets in Spain and tops the list of cities by the largest volume of housing sales. Up to 25% of houses in the capital of Spain are sold in less than a week, up to a month 22% will be required for sale, up to 25% will be sold for up to three months, 22% of houses on the market will be sold in a year and 5% — more than a year.

TERM OF SALE APARTMENTS IN BARCELONA

According to Idealista, up to 26% of apartments in Barcelona will be sold in a week. For a month, three months, a year and for a period of more than a year will be sold 25%, 21%, 23%, 6% goods respectively.

QUICK SALES — SOME TIPS

Plan your sales strategy. Planning a good strategy is a fundamental factor for a quick home sale. You can, of course, do it yourself, but the best option would be to hire a real estate agent.

Set an attractive price for the sale, but do not work at a loss. The price is one of the main factors influencing which buyer and how soon your product will appear. Setting the cost of an apartment in accordance with its characteristics can be quite a difficult task, especially when taking into account the need to create a competitive offer and not lose the possible benefits.

Use the services of online portals for the sale of real estate. There are a sufficient number of popular platforms on the Spanish market, including Idealista, which was already discussed above. According to some data, for example from SimilarWeb, Idealista is the most popular platform in the country at all. In December 2022 alone, it was visited by more than 43 million people. If working with an agency is not for you, then online platforms are your second best option.

Create an attractive and comprehensive ad. In order to stand out from the rest, your ad for sale should not just offer a price, but also explain in detail what is offered to buyers. At the same time, it is necessary to maintain a balance of informativeness and ease of perception. Detailed, but accessible. Photos should be attractive, of good quality, well-lit, preferably with manually distributed light sources behind the frame. Neatness and neatness, together with a lot of lighting, will create a sense of spaciousness for the viewer.

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08/08/2023

ALICANTE WAS THE LEADER AMONG THE PROVINCES OF SPAIN IN THE SALE OF HOUSING IN 2022

The recovery of the real estate sector after the pandemic in Alicante has passed with lightning speed. Sales turned out to be so good that the province became the leader among the provinces of Spain in sales of residential real estate in 2022. About 60,000 transactions were concluded, which was the highest figure since 2007.

The main buyers were foreigners, by and large Europeans. The focus is on the secondary residential market. Prices have increased both in the capital Alicante and in the tourist areas of the province. Among the negative aspects, there was practically no new construction. To some extent, this was and remains due to the lack of free land for construction.

Information about the situation in the region is obtained from the report "Panoramica Alicante" from the Alicante Chamber of Commerce in cooperation with CaixaBank. The report contained information on both the state of the provincial real estate market in 2022 and forecasts for 2023. According to Carmen Pastor, head of the Research and Statistics department at the Chamber of Commerce, the figures show that an amount comparable to a third of all household incomes in the region was spent on the real estate market last year.

As for the forecast for 2023, by the end of the year, the housing market will definitely slow down due to the high cost of new buildings and their shortage associated with a shortage of free land. A slowdown in growth was observed already in the first half of the year. According to forecasts, the demand for housing from foreigners will also fall, and prices will rise, although not too much, since the role is played by increased interest rates.

One of the most successful sectors of the Alicante economy remains the tourism sector. It has already recovered to the pre-pandemic level and continues to grow further. It is expected that in 2023 the tourism industry will be able to report on 60 million overnight stops (in fact, how many days tourists spent on vacation in the province).

Up to 13 million people can pass through the doors of the Alicante-Elche International Airport alone. All this will have a positive impact on the rental real estate market and tourist/resort housing. The main category of tourists are foreigners from France, Belgium and Switzerland. As for national tourism, the deterioration of the economic situation and the situation with inflation will lead to a noticeable decrease in the volume of domestic tourism.

Another positive aspect in the economic recovery of Alicante was the low unemployment. The number of people in this category decreased by 16,000 in 2022. Reforms in labor legislation have allowed more people to find a new permanent job. However, the overall unemployment rate is still high — 15.2%. But this is already lower than the 15.7% that were observed in 2019, before the pandemic.

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07/08/2023

THE BANK OF SPAIN INDICATES THAT IT MAKES SURE THAT BANKS DO NOT ISSUE MORTGAGES TOO CHEAPLY

The Bank of Spain today pays special attention to ensuring that new mortgage loans issued by the country's financial institutions are not provided at too low interest rates, trying to return the demand for credit resources. The central bank is concerned about the potential unprofitability of such practices.

The Bank of Spain found that rates on new loans, which averaged 2.91% in December and 3.54% in March, suddenly slowed their growth. They began to grow more slowly than the key rate. Because of this, the spread between them "benchmark" and real rates began to narrow.

This represents a potential risk for the sector. Angel Estrada, head of financial stability at the central bank, indicated a few weeks ago that the organization is now closely monitoring the unfolding events and is trying to make sure that Spanish banks are not trying to set too low interest rates on loans.

Mortgage interest rates are set on the basis of base rates, to which a margin is added to cover various expenses incurred by banks when issuing loans, as well as a premium, in particular, for the risk of default by the client, which they assume.

A small spread between these two rates, which is commercially attractive to attract business, may not pose a problem in the short term, especially if the base rates are stable. But this poses a risk for banks when rates are rising rapidly, which has been happening since mid-2022.

In its latest report on the financial stability of the banking sector, the Bank of Spain also warned that profitability from such practices could easily fall to a very low level, even bring losses. The events of the last half of the year in the USA and Europe clearly show the vulnerability of the financial sector in such situations.

The situation of a sharp economic downturn, which will lead to a drop in household incomes, is particularly dangerous. A narrow spread between the mortgage rate and the base rate implies a greater risk of losses for both microfinance institutions and the largest banks.

SHARP DECREASE IN THE SPREAD

The Bank of Spain evaluates mortgage loans issued, weighted by the amount of capital lent, based on the interest rate swap index (IRS). It measures the average percentage of financial derivatives that banks can use in order not to lose money, to create a hedge in case of a sudden increase in key rates and subsequent financial problems.

This index reflects the value of money for a certain period of time without a risk premium. Between 2004 and 2022, the average spread between new mortgages and the IRS was 194.4 points. Nevertheless, there was a noticeable big jump by the end of 2020, which amounted to 218.2 points. However, by the end of 2021, it fell to 157.1 points, and in 2022 it dropped sharply from 127.1 points in Q1 to only 21.1 points in the fourth quarter.

All this strongly correlates with the movement of the key rate and the actions of the ECB: historically low interest rates during the pandemic and a sharp increase in rates over the past year as part of the fight against inflation. The Central Bank in its report stressed that the reduction of the spread "implicitly implies a softening of mortgage lending standards." The Bank of Spain hopes that this is only a temporary phenomenon.

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04/08/2023

ABOUT THE REGIONS OF SPAIN WHERE BUYING A PROPERTY WILL REQUIRE SAVING MONEY THE LONGEST

One of the most significant financial investments in a person's life is buying a house. It requires a lot of time, effort, knowledge and, of course, savings. The latter, even with affordable loans, will require many years of accumulation.

According to a study by the InfoJobs platform and the real estate price index from the Fotocasa portal, in 2022 the average period required to accumulate money for mortgage payments was 6.7 years or 81 months.

In 2021, the average term was 6.2 years or 75 months. This is even less than in 2012 with a period of 6.4 years or 77 months. This difference is largely due to historically low interest rates on loans.

Housing prices in Spain by the end of 2022 showed an annual growth of 7.5%, 2,051 euros per square meter. The average gross salary for the same period was 24,395 euros, that is, 2,033 euros per month, if divided into 12 monthly payments on a standard mortgage loan.

In other words, the average Spaniard would need 6.7 years of uninterrupted monthly loan payments for an apartment with an area of 80 square meters if he could not spend a penny of his monthly salary.

Maria Matos, a representative of Fotocasa, points out that in 2022 the market is faced with a situation where buyers have to give a record share of their monthly salary for mortgage payments. And loans have only become more expensive despite the fact that wages remain stable and are rarely indexed.

In 2022, the average salary, if we rely on InfoJobs data, reached 24,395 euros, which turned out to be even lower than it was in 2021 - a decrease of 0.7% in annual terms. Purchasing power, adjusted for inflation, decreased by 6.4%.

In 13 autonomous communities of Spain, residents will need to buy full wages continuously for 11.3 years today, if we take into account the Balearic Islands. The bar can be lowered to 10.4 years, if you look at Madrid.

At the same time, in the same Balearic Islands, the increase in prices for residential real estate for the year amounted to 13.8% at the end of 2022. The square meter has reached the mark of 3,290 euros. The average salary, at the same time, stopped at the level of 23,292 euros, which is lower than the national average.

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03/08/2023

THE SUPPLY OF REAL ESTATE FOR THE ELDERLY IS GROWING

Experts of the Spanish analytical agency DBK note that the number of housing facilities for the elderly on the market is growing, despite the fact that this segment of the market is at the initial stage of its development. The industry of such housing received a serious blow during the pandemic, supply growth has decreased and the employment of premises has decreased, but now this market is apparently recovering.

About 63% of housing for the elderly are apartments of free development, that is, private facilities that are sold at market price. About 21% is accounted for by apartments that have been subsidized by the state. And 16% is accounted for by resort housing on the Spanish coast, designed primarily for foreign clients.

It is noted that the regions of Madrid and Catalonia are the leaders in the number of such real estate properties in Spain. They share more than 1,400 houses and residential complexes for the elderly. In the next two years, DBK experts predict an acceleration in the growth of this market segment — demand, construction rates, and investor interest are growing. Among the sources of investment are investment funds, management and insurance companies, real estate brokers and private businesses.

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02/08/2023

ABOUT 77% OF THE SUPPLY OF COLIVINGS AND ALTERNATIVE HOUSING ASSETS IN SPAIN IS CONCENTRATED IN MADRID AND BARCELONA

In recent years, the trend of real estate construction and alternative residential real estate assets has been gaining momentum in Spain. We are talking about a wide variety of projects, from general type colivings to housing for the elderly. Social housing and flexible living spaces are one of the promising areas of development for the market today.

According to an analysis conducted by the consulting company Activum, up to 77% of the total supply of this type of housing in Spain is located in Madrid and Barcelona. Specifically, the capital of the country accounts for 52% of the supply of such real estate, and the capital of Catalonia accounts for 25% of colivings.

There are many types of colivings. Housing for the elderly (Senior Living) is only one of the types of kolivings, focused specifically on people over 65 years of age. Also, within the framework of the koliving real estate, it is possible to allocate cooperative housing and housing with the possibility for coworking, that is, mixed-type objects with both residential and working spaces. There are also premium resort colivings.

This type of housing is becoming increasingly popular among young people, as it allows them to save significant money compared to buying a regular home or renting. At the same time, coliving creates an atmosphere of community and strengthens ties among the residents of such an object.

Along with colivings among alternative real estate investment assets, today there are projects of the Build-to-Rent format (approx. construction of housing purely for subsequent rental). Student dormitories are also popular among investors.

Currently, 44 projects of colivings are being proposed throughout Spain, we are talking about more than 5,600 residential premises. As mentioned above, 52% of this offer is concentrated in Madrid and 25% in Barcelona. In the province of Madrid, you can find 16 objects of this type, only 2 are located in the city of the same name. The province of Barcelona has 14 facilities and only 3 are located in the city itself.

The closest to Madrid and Barcelona is the Valencian community with 5 coliving facilities, 3 of them are located in the province of the same name. The remaining 2 are located in the province of Alicante.

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01/08/2023

MALAGA IS THE SECOND CITY IN SPAIN IN TERMS OF THE HIGH COST OF CONSTRUCTION

Malaga, along with Barcelona and Madrid, tops the list of the most expensive Spanish cities to build, according to the report "International Construction Costs in 2023" (ICC), which analyzed the 100 largest cities in the world on six continents. In the world ranking, the first three places are occupied by Geneva (Switzerland), London (UK) and New York (USA).

They are followed by San Francisco (USA), Munich (Germany), Hong Kong (China), Copenhagen (Denmark), Boston (USA), Zurich (Switzerland) and Philadelphia (USA). Barcelona, Malaga and Madrid occupy 73rd, 76th and 79th places in the ranking, and Lisbon and Porto (approx. both in Portugal) — 68th and 74th place respectively. The rating was compiled according to the New Horizons index.

The study was published by the consulting, engineering and eco-friendly construction company Arcadis. Cities were ranked according to the cost of construction and the complexity of projects under development. The index covered 20 different types of buildings, including housing, commercial real estate and infrastructure facilities.

DECARBONIZATION IN THE REAL ESTATE SECTOR

The cost data underlying the ICC rating also takes into account changes in the technical characteristics of buildings and the degree of "carbon neutrality" of buildings. The forecasts in the study indicate the inevitability of an increase in the cost of construction in Europe in the short term. It can vary from 5% to 7% for new residential real estate and from 7% to 10% for commercial buildings.

Nevertheless, due to the need to mitigate the already emerging effects of climate change, as well as taking into account the rapidly growing need to reduce carbon dioxide emissions, the cost of construction is increasingly receding into the background. However, for the development of the environmental sector, first of all it is necessary to focus on the best areas of the city, which attract the wealthiest buyers and investors willing to spend large sums of money.

Kathleen Abbott, Arcadis Global Sales Director, noted that the behavior of real estate markets, even if it is spiraling, repeating, but constantly changing, it is necessary to understand that the need to ensure environmental friendliness will not disappear. Decarbonization of the real estate sector will only expand.

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31/07/2023

VALENCIA SUCCUMBED TO THE INFLUENCE OF COWORKING AND TOOK THIRD PLACE IN THE COUNTRY IN THE NUMBER OF

Coworking spaces are gaining more and more popularity in the real estate market of Valencia and its metropolitan community region in particular. The flexibility, quality and comfort they offer both in terms of space used, as well as in terms of tariffs and prices, makes them an increasingly attractive alternative to traditional office buildings. The promotion of the remote work format and flexible employment system led to an increase in demand for offices of this type, which sparked a special appetite among real estate investors.

The pe*******on of this model in Spain remains high and about 2,000 "flexible" office centers are already operating throughout the country. Madrid and Barcelona are still the cities that account for more than half of such a supply and where the special interest of large operators is emphasized. However, cities such as Valencia and Malaga are gradually gaining more and more market share.

The situation is well reflected in the report "The State of the coworking industry in Spain in 2022-23", which was presented in Valencia as part of the XII Coworking Spain Conference 2023 (CWSC). This event brings together representatives of the entire industry, more than 200 people took part in it, 32 national and international speakers, key players in this segment, gave a speech.

The report confirmed the boom of coworking in recent years. At the moment, 1,092 office facilities for this area have been created throughout Spain. Their average area is 643 square meters. Manuel Zea, CEO of CoworkingSpain and organizer of CWSC pointed out: "The growth of the sector this year is due to the large supply on the market from large developers and the high demand of companies practicing coworking and in need of flexible spaces. International large corporations are also increasingly interested in this segment of the Spanish real estate market".

However, due to the fact that investments in the commercial sector are traditionally concentrated in Barcelona and Madrid, they are still the exceptional leaders in the development of this office market. They account for a total of 540 office centers of this category. Barcelona has 315 facilities, 231 of which are located in the city of Barcelona itself. The Madrid region accounts for 225 properties and the capital of the same name — 181 of this number. In third place is Valencia with 67 objects in the region and 56 of them are located in the capital of the same name. Valencia is followed by Malaga with 42 properties, Alicante with 34 properties and Seville with 32 objects.

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28/07/2023

ASTURIAS REAL ESTATE IS BECOMING A VALUABLE ASSET FOR FOREIGNERS LOOKING FOR AN INVESTMENT

A few weeks ago, the General Council of Notaries of Spain published a study according to which Asturias turned out to be one of the most favorite regions of the country for buying housing among foreigners. In the second half of 2022, the number of home purchase transactions on their part increased by 34.7% year-on-year.

In the second half of 2022, 633 real estate sales to foreigners were registered in Asturias and this is the 5th half of the sales growth in a row. One of the reasons for the interest of foreigners is that the introduction of remote work allows European citizens, they are the main buyers, to move to countries and regions with a higher quality of life (according to their assessment), without changing jobs.

There are other reasons motivating foreigners to buy real estate in this region. According to the Spanish real estate broker Commutatio, the investment value of local real estate plays a key role in the growth of popularity. Economic and market indicators make Asturias a good "quiet bay" for large investments. This is especially used by investors from Latin America.

Santiago Seti Falcone, CEO and founder of Commutatio, explains that investors in the region, first of all, are looking for the safest and most stable assets. Ideally promising some noticeable growth over the coming years. The popularity of Asturias, and Spain in general, illuminates them in a positive light. The main source of income from investments in the region is income from renting out real estate, both residential and commercial.

The range of countries of origin of incoming investments is wide. Santiago Seti Falcone notes that their company, for example, can indicate that about 90% of requests from foreign investors come from a number of Latin American countries. The popularity of local real estate is high throughout the Latin American region, not in individual countries. In Spain, all these investors are interested in Asturias itself, Madrid, Barcelona, Malaga, Valencia, Alicante and Mallorca.

Commutatio notes that they often manage to redirect interest from other regions to Asturias, increasing its already high attractiveness. In 2021, the company sold 42 properties, 61 properties were sold in 2022 and 20 transactions were concluded in the first quarter of 2023. The main player is Argentina, but demand is growing from Chile, Uruguay and Colombia, which account for 30% of all Commutatio operations in the country.

https://spain-real.estate/news/

27/07/2023

CORDOBA IS THE FIFTH CITY IN SPAIN IN TERMS OF LIFE QUALITY

Cordoba has officially become the best city in Andalusia in terms of quality of life, according to the analysis prepared by OCU. At the national level, the city received 68 points, reached fifth place and almost equaled Valladolid. The podium with the first three places was occupied: Vigo (70), Zaragoza (69) and Bilbao (69).

Of the major cities in the country, Madrid and Barcelona were the worst in terms of quality of life with 55 and 56 points, respectively. OCU emphasized in the analysis that Barcelona and Madrid stand out with really low ratings from their own residents. Problematic are the cost of living, the availability of real estate, the state of the environment and the cleanliness of the city. People are attracted there only by the presence of work and tourist value.

If we go back to Cordoba, the city has distinguished itself with a high assessment of medical care and the general health care system. About 62% of the residents of Cordoba were satisfied with this area.

ABOUT THE APPROACH TO ANALYSIS

The OCU study concerned a survey of residents of 15 largest cities in Spain. People were asked to express their opinion about their own experience of living in the city and evaluate it from a more objective side. All this is within the framework of a large list of criteria, the main of which were: mobility, safety, medical services, educational services, culture, sports, leisure and entertainment, the state of the environment, labor market, cost of living, real estate market and cleanliness of the city.

The list of cities surveyed was as follows: Madrid, Barcelona, Valencia, Seville, Zaragoza, Malaga, Murcia, Palma de Mallorca, Las Palmas de Gran Canaria, Bilbao, Alicante, Cordoba, Valladolid, Vigo and Gijon.

Specifically in the case of the real estate market, we can mention Zaragoza, Valladolid, Valencia and Cordoba, which pleased their residents with affordable prices and a variety of offers.

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