October 2020 News
Contents
Spain faces a shortage of new construction
Prices for new real estate are rising
-2.4%
Land has never been this cheap
Rental growth
Elevator is the main thing
Hotels offer rooms for remote workers
1. Spain faces a shortage of new construction
Next year Spain will face a shortage of new construction. This is reported by the country’s largest media outlets. According to their data, due to the consequences of the 2020 pandemic, Spain issued approximately one-third fewer construction permits than usual.
“Roughly speaking,” explains Daniel Cuervo from the Spanish Construction Developers Association, “last year the country began construction of approximately 100,000 properties. And in 2020 there will be no more than 70,000.”
2. Prices for new real estate are rising
Against this backdrop, prices for new housing in Spain have risen. According to Idealista, the cost of new construction has reached a maximum for the last ten years — 2,472 euros per square meter. Prices were only higher in 2007, on the eve of the global economic crisis.
Spanish analysts explain this trend by consistently high demand for new housing with limited supply. According to experts, during the pandemic period, Spaniards realized more than ever the need to have their own roof over their heads. Additionally, many Spanish parents decided this year to buy housing for their children so they could feel comfortable and safe while working from home during quarantine.
3. -2.4%
Despite the increase in new construction prices, the overall cost of Spanish real estate in the third quarter of 2020 was 2.4% lower than a year earlier. This was reported by Reuters citing the Fotocasa agency. The main reason is the decline in secondary housing prices by 5-10% depending on the region.
The most noticeable changes occurred in Spain’s largest cities — Madrid and Barcelona, where secondary housing prices in individual districts fell by 8-9%. As experts note, the most serious blow to the country’s economy came in the second quarter, when Spain lost about 18% of GDP.
4. Land has never been this cheap.
Prices for construction plots in Spain have reached a historical minimum. Today the cost of land in the country is valued at 139.6 euros per square meter. This data was published by the Department of Housing Construction, which has been keeping statistics since 2004.
According to the study, plots in Madrid, Seville, and Las Palmas have become the cheapest. The maximum cost of land was recorded in 2007, when a square meter of plot was valued at 285 euros.
5. Rental growth
The COVID-19 pandemic has caused a sharp growth in Spain’s rental market. According to the Idealista portal, since the beginning of the epidemic, the number of rental housing advertisements has grown by 63%. This is due to the fact that many have postponed purchases until stable times and prefer to remain in rental housing.
The most significant growth in the number of advertisements was recorded in Madrid (+96.1%), Andalusia (+81.6%), and the Autonomous Community of Valencia (+66.7%).
6. Elevator is the main thing
Buying an apartment in a building with an elevator in Spain will cost 33.5% more than a similar option without one. At the same time, every third apartment put up for sale in October was located in a building with only stairs. Such offers, despite their attractive price, are rarely considered by elderly people and families with children.
According to Idealista, among provincial capitals, the most apartments in buildings with elevators are offered in Pontevedra (86.5% of all offers), Pamplona (85.9%), and Lugo (85.7%). Buildings with elevators are least common in Toledo (48.7%), Segovia (54.7%), and Palma (59.2%).
7. Hotels offer rooms for remote workers
A new trend has emerged in the Spanish hotel industry: hotels that have suffered the most this year are offering vacant rooms to local residents for remote work. Some also provide conference rooms. The first to take this step were French B&B chain hotels: in Spanish and Portuguese hotels of the chain, the service is available from 9:00 to 19:00 for 19 euros. At the Aloft Madrid Gran Vía hotel, a workspace in the common area is offered from 9:00 to 18:00 for 12 euros — the cost includes printing up to 20 pages. Dozens of hotel chains and private hotels have already caught on to the trend. Depending on the establishment’s policy, prices range from 12 to 109 euros.
It should be reminded that Spain has adopted strict measures to combat the COVID-19 pandemic. The government issued a decree regulating remote work. On October 29, the majority of parliamentarians supported the initiative to extend the special regime until May 9, 2021. This regime provides, in particular, for a curfew from 23:00 to 06:00.