March 2021 News
Contents
Coronavirus took away a quarter of foreign purchases
Real estate — a weighty reason for travel
Half the country rents housing
More about the rental market
Time to share with those in need
Solar boom
Everything will be fine
1. Coronavirus took away a quarter of foreign purchases
Real estate purchases by foreigners in Spain significantly decreased in 2020. According to Spain’s Property Registry, foreigners purchased 24.6% fewer properties than in 2019. The total number of transactions involving foreign buyers amounted to 47,500 — that’s 11.3% of all purchases. Despite the difficulties related to the pandemic, analysts note that three out of four planned deals still took place, which indicates market resilience. The most active foreign buyers were British, French, Germans and Moroccans.
2. Real estate — a weighty reason for travel
The UK government included real estate transactions in the list of acceptable reasons for international flights during lockdown. From March 29, British citizens gained the ability to fly to Spain for conducting transactions provided they have a negative PCR test taken no earlier than 72 hours prior. Spain planned to introduce “covid passports” by the end of May to stimulate tourism.
3. Half the country rents housing
According to a forecast by consulting company JLL, in the coming years 40% of Spaniards will live in rented housing — compared to the current 26%. Housing prices are growing 2.5 times faster than salaries, making home ownership increasingly less affordable. The uncertainty caused by the pandemic has strengthened preferences in favor of renting, especially among the younger generation seeking flexibility.
4. More about the rental market
After sharp growth in rental rates in 2020 (in September the average rate was 11.4 euros per square meter per month), prices stabilized in early 2021. In February, decreases were observed in several cities: Albacete (-2.9%), Castellón (-2.6%) and Barcelona (-0.6%). Conversely, capitals of some provinces became more expensive: Guadalajara (+3.2%), Tarragona (+3%) and Burgos (+2.2%).
5. Time to share with those in need
On March 2, the government of the Balearic Islands signed a decree on expropriation of vacant housing. Property owners who own 10 or more unoccupied properties for more than two years risk their seizure for the social housing fund. The initial criteria covered 56 properties, predominantly in Mallorca. Authorities offered compensation of about 382 euros per month — approximately one-third below market rates, which prompted legal challenges.
6. Solar boom
The cost of installing solar panels has decreased by 70% over the decade — to approximately 600 euros per square meter. Equipping an average chalet costs about 11,000 euros, but allows saving about 45,000 euros over 25 years. Optimal installation requires southern roof orientation, inclination angle from 15 to 45 degrees and absence of shading objects.
7. Everything will be fine
Deloitte predicted a 32% growth in investments in Spanish real estate in 2021, estimating the volume of investments in the sector at 11.5 billion euros. The recovery will affect not only housing, but also hotels, offices and parking facilities. The positive dynamics is supported by the progress of vaccination and optimistic expectations in the tourism sector.