New property is seeing a boom in demand
Real estate sales figures for October 2021 show a monthly fall of 13.4%, but a year-on-year increase of 22.2%. This growth rate is the best October for 14 years. For the eighth consecutive month, the number of sales transactions in Spain show very high interannual increases. This is a sign that the sector continues to be strong and is leading the recovery of the Spanish economy.
October saw over 46,000 transactions closed. This is the seventh month this year that saw over 45,000 purchases. However, the figure show a moderation in recent months since the start of the upturn in April. It is very positive that market activity is increasing, this means that people place a lot of value on housing and it indicates that the interest in buying a home is still very latent in society. Although the most important thing is that prices are not growing at the same rate.
The health crisis and especially the confinement experienced last year have made Spaniards give housing more importance than ever. We have never had so many Spaniards with the intention of changing their home, so interested in looking for a new house and, month after month, the data we see on sales confirms that housing is once again the main protagonist.
In fact, a September report from Fotocasa showed that the participation of Spaniards in the purchase market has not only recovered, but also presents data higher than that registered before the coronavirus arrived. The study shows that in February 2020, 39% of the demand for housing was looking to buy and in September 2021 it increased to 44%. Purchase demand is experiencing an unprecedented boom. In fact, the market transformation has balanced the rental and purchase interaction. Something we haven’t seen in a long time. The interest in buying is driving the recovery of this market and showing historical figures regarding the participation of the purchase.
New Build Projects Gaining Ground
Another very relevant point is found in the number of transactions involving new homes which is also increasing. Specifically, in October 2021, 9,344 new housing sales transactions were carried out, representing a year-on-year increase of 21.6% compared to 2020. “New-build housing is experiencing an unprecedented boom since the outbreak of the pandemic. Many Spaniards are opting for brand new developments for various reasons. One of them is because they tend to have common spaces such as gardens or swimming pools and in most cases they have a terrace, characteristics that have become essential for Spaniards looking for housing after confinement“, explained María Matos from fotocasa.
Matos added that “another important reason comes from the hand of teleworking and is that the fact of not having to go to the office every day is causing many Spaniards to leave the cities and buy housing in the periphery and that is where a large part of the offer of new construction is showing. Living in the city center or close to work is no longer so important after the pandemic. The sector has a new challenge ahead: that of responding to the great boom in demand for this brand-new home.”
The rapid recovery in the real estate sector has been very revealing. The sector has left behind the uncertainty caused by the health crisis and Spaniards once again dare to buy a home, or that they even perceive this market turmoil as a good situation to find opportunities. Furthermore, it is also being a market that is attracting investors, in which real estate assets always tend to revalue.
Rental Property Prices
In Spain, the price of rental housing increased 1% in its monthly variation and fell by -4.2% in its interannual variation, placing its price at €10.19 p/m² per month in November. This last value (-4.2%) is the tenth decrease registered in the chain since February 2021.
This downward trend in rental prices is a direct consequence of the market transformation caused by the impact of the pandemic, where the demand for rent has decreased by several percentage points, due to the low participation of older citizens. Another factor is that demand has been directed from the city centre to the most peripheral areas, which has allowed the most stressed regions such as, for example, Madrid capital, to continue declining. However, it is interesting that, for the first time, the cities of Madrid and Barcelona, which for more than a year had gone hand in hand, have forked, each taking its own path. While Madrid continues faithful to the price reductions, Barcelona ends the truce and presents a rather sharp rise.
13 autonomous communities present positive monthly data in November 2021. The communities of La Rioja and Extremadura, with an increase of 3% and 1.8%, are the regions that have increased the most in price. They are followed by the Region of Murcia with 1.7%, the Valencian Community with 1.5%, Castilla-La Mancha with 1.4%, Catalonia with 1.3%, Andalusia with 1.2%, the Canary Islands with 1.2%, Madrid with 0.9%, Galicia with 0.6%, Asturias with 0.5%, Balearic Islands with 0.4% and Castilla y León with 0.1%. On the other hand, the price of rental housing decreased in the communities of Cantabria with -0.8%, the Basque Country with -0.7%, Navarra with -0.6% and Aragon with -0.6%.
Regarding the ranking of Autonomous Communities with the most expensive rental prices in Spain, Catalonia and Madrid are in the first places, with prices of €13.95 p/m² per month and €13.47 p/m² per month, respectively. They are followed by the Basque Country with €13.27 p/m² per month, the Balearic Islands with €11.97 p/m² per month, Navarra with €9.76 p/m² per month, the Canary Islands with €9.67 p/m² per month, Cantabria with €9.13 p/m² per month, Valencian Community with €8.62 p/m² per month, Andalusia with €8.55 p/m² per month, Aragon €8.38 p/m² per month, Asturias with €8.01 p/m² per month, La Rioja with €7.47 p/m² per month, Region of Murcia with €7.32 p/m² per month, Galicia with €7.30 p/m² per month, Castilla y León with €7.24 p/m² per month month, Castilla-La Mancha with €5.86 p/m² per month and Extremadura with €5.61 p/m² per month.
Prices by Province
Rental prices increased in 26 provinces, four remained steady (0%) compared to the previous month and 17 saw a fall in prices. The order of the top 10 is: Albacete with 5.5%, Toledo with 4.0%, Almería with 3.6%, Cáceres with 3.5%, La Rioja with 3.0%, Las Palmas with 2.5%, Valencia with 2.4%, Murcia with 1.7%, Barcelona with 1.6% and Seville with 1.4%.
On the other hand, the provinces with falls in rental costs are: Lleida with -3.3%, Segovia with -2.9%, Guadalajara with -2.9%, Huesca with -2.0%, Melilla with -0.8%, Cantabria with -0.8%, Palencia with -0.6%, Navarra with -0.6%, Ourense with -0.4% and Zaragoza with -0.3%.
Regarding rental prices, the most expensive province is Gipuzkoa with €15.63 p/m² per month, followed by Barcelona with €14.90 p/m² per month, Madrid with €13.47 p/m² per month, Bizkaia with €12.68 p/m² per month, the Balearic Islands with €11.97 p/m² per month, Araba – Álava with €10.56 p/m² per month, Las Palmas with €10.10 p/m² per month and Malaga with €10.01 p/m² per month.
From all of us at Marbella For Sale, we wish you a Happy and Healthy Christmas and a prosperous 2022!
