Real Estate Market Trends in Spain in 2022
Real Estate Market Trends in Spain in 2022
Below is a detailed analysis of macro- and microeconomic factors that will affect prices in the Spanish real estate market. Experts from VirtoProperty agency provide a price forecast for 2022.
Now let’s talk about several trends that indirectly impact the market — through changes in consumer mindset and habits.
Two pandemic years have changed us more than we can realize.
What has remote work format led to?
Since people have become accustomed to working remotely, and in many companies the remote format has become primary for employees, living near the office has lost its former importance. Home buyers are looking for more affordable and quality options on the outskirts.
This is true not only for moving within the country. Residents of Northern Europe are actively drawn to Spain as a country with a more peaceful environment, which affects both demand and real estate prices.
The second factor is changing requirements for an apartment or house. Buyers and tenants want housing where they can work remotely: ideally — a separate room designated as a home office.
If you’re looking for investment real estate with a limited budget, it might be worth expanding your search beyond traditional tourist locations and choosing options where one of the rooms can be converted into an “office”. This will make the apartment more attractive for long-term rental.
Back to nature
Since proximity to work has ceased to be a mandatory criterion when buying real estate, people have developed other priorities. One of the first is enjoying nature. This is not only about large terraces and balconies, but also about the possibility of walks and the presence of public spaces.
As a consequence, in 2021 Spanish demand for “second homes” grew. This refers to a house or apartment near the coast or outside the city.
Nature is sought not only by Spaniards — in 2021 the number of real estate transactions involving foreigners increased by 47%, and this trend continues in 2022.
Eco-lifestyle and technology
The perception of home as part of nature is not limited only to the place of residence. Requirements for construction quality have also changed.
Houses built from natural or recyclable materials, capable of providing maximum comfort with minimal energy consumption, are of particular interest to buyers. Construction of eco-friendly housing has increased in recent years, as has consumer demand for such efficient and socially responsible type of real estate.
Zero energy homes produce as much energy as they consume per year, using renewable sources.
Energy+ homes produce more energy than they consume per year. This allows selling excess and earning income.
Although a significant part of demand for sustainable construction is related to conscious consumption, interest in “smart homes” is also driven by reduced operating costs.
If just a couple of years ago a “smart home” was rather a technological toy for wealthy consumers or tech geeks, the rapid growth of energy prices in 2021 made middle-income consumers also consider such a purchase. Technology development has significantly reduced the cost of “smart homes”, and not only Zero energy home projects but also Energy+ home projects have appeared on the market.
According to expert estimates, the “smart homes” market in Spain will grow by 300% by 2024.
Youth chooses new forms
Experts predict growth in the share of young buyers aged 20 to 35 in the real estate market in 2022. This is again related to the pandemic, which unfortunately claimed many lives, but also increased the number of young people who inherited housing. Most of them do not plan to live in their parents’ homes, but dream of selling them and using the funds to buy new housing. The second stimulus was government subsidies and bank support programs for youth.
Those who already have or plan to obtain funds for a down payment choose new construction. Those who don’t have enough money consider coliving options.
Coliving is a format of budget housing where several people or families live together.
One could joke that “millennials invented dormitories,” if not for the interest of large development companies building coliving projects in different parts of Spain. Big money only goes where there is profit, and there is no doubt about the demand for such real estate.
Desire for novelty
The boom in new construction and apartments sold out even at the start of sales can be talked about endlessly. If at the beginning of 2021 this still caused surprise, now it has become the norm.
We warn buyers focused on new locations: be prepared for quick decision-making and prompt transaction processing.
There are many reasons for the boom: pandemic deferred demand, problems with obtaining permits for new construction that existed even before the pandemic, and, not least, changing buyer preferences.
The main thing in all this is that the trend will not change. In 2022, new construction will remain a priority for buyers, the hunt for liquid options will begin, not all the best offers will be publicly available, and it’s important to find an agent who knows the market and maintains good relationships with developers.
Consumer desire for novelty is not limited to new construction.
Spaniards have massively taken up renovations. Home goods stores are experiencing such an influx of buyers that they haven’t seen in a long time. 2021 became the year when the number of requests for renovating existing housing sharply increased. The renovation boom is also evidenced by reports from the portal habitissimo.es, which helps find builders and repairmen. In 2021, the number of deals registered on the portal increased by 41%.
This trend will continue in 2022, so stock up on contacts of verified renovation crews in advance.