Summer 2020 News

Contents

  • −6.1% on secondary real estate

  • Rental: taking advantage of the situation

  • Masks are here to stay

  • Courts sleep, okupas awaken

  • Penthouse: expensive but popular

  • When will the market recover? CaixaBank forecast

  • Why not renovate your walls?

1. −6.1% on secondary real estate

View on Alicante

According to Idealista, secondary real estate prices in Spain dropped by 6.1% during the pandemic. A comparison between July 2019 and July 2020 showed a decrease of approximately 4.8%. The average cost of secondary housing was €1,650/m².

The Balearic Islands turned out to be the only region where prices increased (+0.4%), while Catalonia showed the largest decline (−8%). Reduced demand led to price drops in most regions. However, individual cities showed resilience: in Alicante province, the average decrease was −0.2%, although Alicante city itself grew by 5.9%, Benidorm by 2.7%, and Torrevieja by 0.5%. Málaga province added 2.7%, with Málaga city at 5.1%, Estepona at 0.8%, and Marbella at 3.9%.

2. Rental: taking advantage of the situation

Office in Madrid

Reduced demand for property purchases prompted buyers to turn to rentals. Average rental yields rose to 8.2% annually compared to the pre-quarantine figure of 7.6%. Offices brought the highest returns at 10.9%, followed by residential properties at 9.3% and parking spaces at 7.6%.

3. Masks are here to stay

Man in mask at the beach

Coronavirus restrictions remained throughout the summer of 2020. Andalusia mandated mask-wearing on beaches and by pools from July 14, except for children under six and people with respiratory conditions.

4. Courts sleep, okupas awaken

Okupas with bags

During quarantine, while courts were closed, the number of okupas (squatters) significantly increased. Property owners, especially foreign investors who couldn’t travel to Spain, faced difficulties in legally evicting illegal occupants. The court closure, which lasted nearly three months, exacerbated the problem.

The majorityof projects remain postponed

Penthouses in Spain cost on average 27.1% more than similar apartments on lower floors and represent only 7.7% of the market. The price difference varies significantly: in Guadalajara +57.1%, in Valencia +55.9%, in Seville +51.2%, while in Barcelona and Madrid the markup is lower at +18.1% and +21.2% respectively.

6. When will the market recover? CaixaBank forecast

CaixaBank forecasted a decline in housing prices of 6%–9% in 2020, with recovery to pre-COVID levels postponed until 2024. Spain’s GDP was expected to fall by 13%–15% year-on-year, with a return to pre-crisis levels by 2023. However, real estate market losses were predicted to be less severe than during the 2008 crisis.

7. Why not renovate your walls?

After the quarantine was lifted on May 25, 60% of Spanish families began renovating their homes. Given that 91% of Spaniards started spending more time at home, buyers postponed property purchases, prioritizing improvements to their existing housing.