Real estate market trends in Spain in 2022

This is a detailed breakdown of the macro and microeconomic factors that will affect prices in the Spanish property market this year. The experts from our real estate agency VirtoProperty give a price forecast for 2022.

And now I want to discuss a few trends which affect the market indirectly, through the changing consumer thinking and habits.

The past two pandemic years have changed us more than we can realise.

Since we have adapted to working remotely, and in many companies it has become the main way of work for employees, residing in a house close to the workplace has become almost irrelevant. Home buyers are therefore looking for cheaper, better quality alternatives on the outskirts.

This is true not only in relation to moving within the country. Northern Europeans are actively being drawn to Spain as a country with a more tranquil environment. This will affect both the demand and the cost of real estate.

The second factor was a change in the requirements of a flat or house. Buyers or tenants now want a home where they can work remotely: ideally, there should be a separate room dedicated to a home office.

So if you are looking for an investment property on a budget, it may be worth taking a broader look at your options than traditional tourist locations. And choose options where one of the rooms can be converted into an "office". This will make your flat more attractive for long term rentals.

Since proximity to work is no longer an essential requirement when buying property, people have other criteria when choosing a house or flat. One of the first to do so was to enjoy nature. And that means not only having big terraces and balconies (I wrote about this last year), but also being able to walk around and having public spaces.

And as a consequence, in 2021 Spaniards' demand for 'second homes' has grown. Basically it is a house or flat, located near the coast or outside the city.

Not only the Spaniards are looking for nature around – in 2021, real estate transactions involving foreigners increased by 47% and this trend also remains in 2022.


Property on the Costa Blanca

The view of a house as a part of nature is not limited to just where you live. The requirements for the quality of construction have also changed.

Houses built with natural or recyclable materials that are able to provide maximum comfort with minimum energy consumption will be of particular interest to buyers. The construction of ecological homes has increased in recent years, as has consumer interest in this type of efficient and socially responsible housing.

And while much of the demand for sustainability is linked to conscious consumption, the demand for smart homes is also tied to lower maintenance costs.

Whereas just a couple of years ago, the smart home was more of a technological toy for wealthy consumers or techno-geeks, skyrocketing energy prices in 2021 have made even middle-income consumers consider buying a smart home. Developments in technology have significantly reduced the cost of a smart home, and not only Zero energy home, but also Energy + home projects have appeared.

Experts in Spain estimate that the smart home market will grow by 300% by 2024.

How much does Zero energy home cost?

Experts predict that the proportion of young buyers aged between 20 and 35 will increase in the property market in 2022. Again, this is due to the pandemic, which has unfortunately taken many lives, but has also increased the number of young people who have inherited their homes. Most of them do not plan to live in their parent's homes, but dream of selling them and using the funds to buy a new property. The second driver has been funds they get from the state and youth support programmes from banks.

And those who already have, or are planning to get funds for a down payment in the near future, choose new buildings. Those who do not have enough money are looking at coliving options.

One could make a joke on "millennials inventing a dormitory" if it weren't for the interest of large development companies constructing coliving-home projects in different parts of Spain. Big money only comes where there is profit and there is no doubt that such properties will be in demand.

We can talk continuously on the boom of new buildings and the sold out for new flats already at the start of sales. Whereas at the beginning of 2021 this was somewhat surprising, it has now become the norm.

We warn buyers targeting new locations to be prepared for a quick decision and a quick deal.

There are many reasons for this boom: the pandemic of deferred demand that I have already mentioned, the problem with obtaining permits for new construction that existed even before it started, and last but not least – changes in buyers' preferences.

The main thing in all this is that the trend will not change. In 2022 new buildings will be the priority for the buyers, there will be a hunt for liquid options, not all of the top offers will be in the public domain and it is important to find an agent who knows the market and is on a good term with the developers.

The consumers' craving for novelty is not limited to new buildings.

Spaniards have taken up renovation work everywhere. This is the highest number of customers that we have not seen in a long time in DIY shops. 2021 was the year when the number of renovation requests for existing homes skyrocketed. The renovation boom is also evidenced by reports from the habitissimo.es portal, which helps to find builders and renovators. In 2021, the number of deals registered on the portal increased by 41%.

And this trend will continue in 2022. So stock up on the contacts of trusted repair teams in advance.