In Spain, the demand for buying real estate to preserve investments is growing again. In 2021, 23% of secondary real estate transactions were carried out by individuals for investment purposes: they were made by buyers seeking to make a profit from their savings. This indicator is four points higher than in 2020 (19%), and corresponds to the data recorded before the pandemic. This is reported in the latest report on the housing market prepared by the Tecnocasa group and the Pompeu Fabra University (UPF).
The percentage of homes bought for investment purposes has been increasing over the past year, reaching 24% in the last fourth quarter. Among the major Spanish capitals, the largest percentage of investors in 2021 falls on the cities of Valencia (37.8%), Zaragoza (31.3%) and Madrid (27.9%). They are followed by Barcelona (24.5%), Seville (23.4%) and Malaga (23.1%). All of them demonstrate an indicator above the national average.
Jose Garcia-Montalvo, professor of economics at UPF and coordinator of the report, stressed that the data relate to private investors, and not to large owners who buy housing in order to rent it out later. «There is uncertainty about the stock markets, and people who previously wanted to invest there have switched to investing in the real estate market now that housing prices in Spain are showing rapid growth», Garcia-Montalvo explained during the presentation of the study.
According to the economics professor, the new housing law approved by the government on February 1, 2022, will not have a significant impact on small investors.
The law allows autonomous communities to limit the prices of houses in high-risk areas if they belong to large owners who have the status of a legal entity (company). A large homeowner is considered to be the owner of more than 10 real estate objects, excluding garages and warehouses. Small landlords will not be subject to marginal rental prices, although they will have restrictions on rent increases. They will be able to raise them only in accordance with the CPI (consumer price index).
Lazaro Cubero, director of analysis of the Tecnocasa group, brought out the portrait of the investor in 2021 and the type of real estate that is in the greatest demand. Currently, investors prefer to buy apartments (94.7% of the total), rather than houses, penthouses or other types of housing. This is a housing with an area of 40 to 60 square meters (most often with 2 bedrooms), in houses without an elevator. This is an empty property to be restored, more than 60 years old, for which the investor receives a discount from the initial price of more than 12%. This type of property has a price significantly lower than the average.