Spanish Real Estate Market: October 2020 News

The construction of houses is reduced, and local hotels attract people to remote work. The most interesting news and analytics for the past month.
Spanish housing becoming cheaper during the pandemic? Have the number of buildings under construction decreased? Is it true that Spaniards work remotely from the hotels? If you are interested in the latest news from the Spanish real estate world and up-to-date market analytics, then welcome to the new issue of our digest!

1. Spain is facing a shortage of new buildings

Next year Spain will face a deficit of new properties. The largest media of the country are reporting on this now. They say that due to the consequences of the 2020 pandemic, in Spain there were issued about ⅓ fewer construction licences than usual.
 Number of construction licences in Spain
Compare: number of construction licences issued in the period of January-July 2019 and the same in 2020. El Pais screenshot.
"Roughly speaking," explains Daniel Cuervo of the Association of Construction Promoters in Spain, "last year construction began on about 100,000 sites in Spain. And in 2020 there are likely to be no more than 70,000 sites."

You can learn more about current trends and market forecast in this article.

2. Prices for new properties increase

In light of the above mentioned, there has been an increase in the price of new housing in Spain. According to Idealista, the cost of newly built real estate in Spain has peaked in the last ten years: €2472/m². The higher price was only in 2007, before the global economic crisis.
Screenshot from the Idealista website
Screenshot from the Idealista website
Spanish analysts explain this trend of consistently high demand for new housing against a limited supply. According to experts, during the pandemic, Spaniards are more aware than ever of the need to have a roof over their heads. Besides, many Spanish parents this year decided to buy a home for their children so that they could feel safe and comfortable working from home during quarantine.

Why New Spanish Buildings are better than 'Secondary': 8 reasons

3. -2,4%

Despite the increased cost of new buildings, the price of Spanish property in general in the third quarter of 2020 was 2.4% lower than the year before. Reuters reported this fact with reference to the Fotocasa agency. The main reason was the decrease of cost of secondary housing, from 5% to 10% depending on the region.
Barcelona view
Secondary property in Madrid and Barcelona drop in price faster than in other cities
The most significant changes are seen in Spain's largest cities – Madrid and Barcelona – where secondary property prices have fallen by 8%-9% in some areas. As noted by experts, the biggest blow to the country's economy occurred in the second quarter, when Spain lost about 18% of GDP.

4. The land has never been so cheap.

The price of building plots in Spain has reached a historic low. Today, the value of the land in the country is estimated at €139.6/m². This was reported by the Department of Housing, which has been gathering statistics since 2004.
Image from the Euronews website
Image from the Euronews website
According to the study, the construction sites of Madrid, Seville and Las Palmas lost the most in price. The maximum value of local land was recorded in 2007, when one sq.m. of the building plot was estimated at €285.

5. Rise of rental

The Covid-19 pandemic has caused a sharp increase in rental housing in Spain. According to the report of Idealista portal, since the beginning of the epidemic, the number of real estate rental announcements in the country has increased by 63%. This is since many people have put off their purchases for some stable time and currently prefer to stay in rented properties.
Young couple in the rental flat
The most significant breakthroughs in terms of number of ads were seen in Madrid (+96.1%), Andalusia (+81.6%) and the Autonomous Community of Valencia (+66.7%).

6. Elevator is the king

Buying a Spanish apartment in a house with an elevator will cost 33.5% more than a similar option without it. However, every third apartment offered for sale in Spain in October only has a staircase. Such offers, despite the attractive price, are rarely accepted by retired and families with children.
According to Idealista, among provincial capitals, the most advertised apartments for sale in buildings with elevators can be found in Pontevedra (86.5% of all offers), Pamplona (85.9%) and Lugo (85.7%). The least common buildings with elevators are in Toledo (48.7%), Segovia (54.7%) and Palma (59.2%).

7. Hotels offer rooms for remote workers

There is a new trend in the hospitality industry in Spain: hotels that have suffered the most this year offer free rooms to locals for remote work. Some also provide their conference rooms. French B&B hotels were the first to take this step: in Spanish and Portuguese hotels of the chain, the service is available from 9:00 to 19:00 and costs €19. At the Aloft Madrid Gran Vía hotel, people are offered a workspace in one of the common areas from 9:00 to 18:00 for €12. The price includes the possibility to print up to 20 pages. Several dozens of hotel chains and private hotels have already started this trend. Depending on the hotel's policy, the price ranges from €12 to €109.
Salary statistics
It should be remembered that Spain has adapted some strict measures to combat the Covid-19 pandemic. The country has issued a decree regulating remote work. On 29 October, most officials supported the government's initiative to extend the special regime in the country until 9 May 2021. The special regime provides, among other things, for curfews from 11 p.m. to 6 a.m.
Thanks for reading! If you are interested in Spanish real estate, please, open our catalogue and choose an appropriate property. Take care of yourself and subscribe to the Virtoproprety social media to see future articles!

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