Five reasons why Spain is becoming a paradise for the Protech industry

Five reasons why Spain is becoming a paradise for the Protech industry

According to the research «Proptech Global Trends 2021» for 2020-21, Spain is the second country in the world in terms of investments in the PropTech industry. We are talking about 824 million euros, which is second only to the United States. In terms of the number of companies, Spain ranks third in Europe — 536 PropTech companies are operating in the Spanish market today.

The data confirm that Spain is one of the key hubs for innovative technological development of the construction sector and the global real estate market. All this is especially noticeable against the background of the fact that Spain itself is far from the most technologically advanced country in the world, easily inferior to countries such as Great Britain, Germany or Singapore.

According to available data, already in 2021, the growth rate of the number of companies from this industry in the Spanish market reached 8%, according to Proptech Map data prepared by the portal API Catalonia.

These technologies, used in the construction, operation and commercialization of real estate, help the Spanish market to maintain noticeable stability in development against the backdrop of the emerging global economic crisis. According to CBRE, total revenue from operations in the Protech segment exceeded 14 billion euros as of September 2022.

The German Protech company Everest analyzed the Spanish market and formulated five reasons why the development of innovative technologies and the digitalization of real estate in Spain is so successful:

  1. Spain has a large real estate market, which is at an early stage of digitalization. There are quite a lot of free areas for development within the sector, which has the largest weight in the Spanish economy. So, back in 2020, during the pandemic, the share of the real estate market in the economy was 11.7% of the country's GDP.
  2. Extremely motivated customer base, which creates a large demand According to CIS, 81.8% of Spanish citizens prefer real estate owned by real estate for rent. As soon as the market and financial opportunities allow, Spanish buyers enter the market in huge numbers in search of new housing.
  3. The market is highly decentralized. Unlike such sectors of the economy as telecommunications, IT or energy, there is no status quo in the real estate market and in the construction sector, supported by several major megacorporations. There is no oligopoly yet. Due to this, many medium-sized and small companies are actively developing, which do not have a clear leader in their ranks. Within the framework of competition, many of them are ready and eager to resort to the introduction of new technological solutions offered by the PropTech industry.
  4. The desire of potential buyers to obtain exclusive and, at the same time, effective solutions on the market. Especially in relation to the interactions of the seller and the buyer, the client and the agency. One of the major problems in the market is excessive tradition and frequent sluggishness of the market in the aspect of providing services for the sale of real estate and its maintenance. Digitalization allows the market to gradually eliminate unnecessary bureaucracy and delays from the processes.
  5. When compared with other world real estate markets, Spain demonstrates a high rate of purchasing decisions on the part of buyers and an extremely short period of sales of properties that have just entered the market. This is already an excellent touch to the overall attractiveness of the Spanish real estate market and at the same time gives a good start for technological acceleration in operations.
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