International investors continue to bet on residential real estate around the world. Spain is one of the most attractive destinations for such investments in Europe. And this is despite all the economic uncertainty and the macroeconomic downturn that has hit the entire continent.
According to a study by CBRE consulting company, Spain is the only European country that has two cities at once in the ranking of the top 10 investment destinations in Europe. The residential sector attracts huge funds from international investors, both individuals and companies. We are talking about the capital Madrid and its famous "opponent" — Barcelona.
Moreover, Madrid has risen to second place in the European ranking, second only to Berlin. The latter attracted 1.8 billion euros of investment, while the Spanish capital — 1.4 billion. Barcelona took the seventh place, thanks to the attraction of 900 million euros of investment. This is ahead of the figures of Amsterdam, Helsinki and Vienna.
Also, according to CBRE, during 2022, the residential sector of the European market attracted almost 60 billion euros. At the same time, more than 58% of the total investment came from international capital, that is, about 35 billion euros. In 2012-16, for example, the share of international investment participation was 33%, and in 2017-22 — 41%.
Although it is worth noting that the CBRE report indicates that last year the European residential real estate market experienced a slowdown in investment growth compared to 2021, which in many ways was a record. In particular, almost 60 billion euros raised in 2022 indicate a significant drop in attracted investments by 45%.
Nevertheless, CBRE emphasizes that 2022 is still a positive year when compared with the pre-pandemic periods. The Spanish market managed to take advantage of the enthusiasm of buyers and investors in 2021, setting a number of records and gaining a foothold in the top leaders of Europe, but any growth requires correction. Therefore, a decline was to be expected in any case. It only happened sooner rather than later.
Now housing has to compete with other recovering sectors of the market. For example, offices that are beginning to breathe into the residential sector in the back, industrial facilities, retail facilities, and so on. The study also emphasizes that Europe has a greater potential for the growth of the real estate market than, for example, the United States, which has been a world leader for 10 years.