Real estate investments in Spain will become inflation protection in 2022

The inflation in Spain is 5.5%. According to Ferran Font, Head of Research and Press Secretary in housing will become a reliable protection against inflation: «If the annual volume of investments increases by at least 6% in December. CPI (consumer price index) growth is expected to be very close to this figure».

Due to the low interest rate, real estate is a much better investment option than Treasury bills and bonds. A full analysis shows that in 2022, investment in housing will be the biggest means of protection against inflation.

«High inflation combined with a slowdown in the pace of new housing construction, reduced availability of secondary supply and low interest rates are transferring most investors to the real estate sector, turning it into a safe asset again», Font says.

The key factor favoring this scenario was the pandemic, to which is «the temporary nature of CPI growth and economic recovery added».

All these forced banks to postpone raising interest rates. «For these reasons, real estate investments are a good umbrella against inflation», Font concludes.