The real estate market is in uncertainty, it suffers from a slowdown in economic growth and stagnation in the degree of activity in the market itself. This is provided by the richest range of factors, including, of course, inflation and rising interest rates. Low rates of new construction also do not help the situation. Despite the presence of a large number of interested consumers and investors who trust the market, the situation can always go according to the worst possible scenario.
However, if you pay attention to the opinions of the market participants themselves, including developers, investment funds, real estate appraisers and many others, the development of the situation in a bad scenario is unlikely. All of them agree that there is a noticeable slowdown in the volume of transactions in the Spanish real estate market, but most are confident that this situation will not last long.
The problem to a greater extent is not even negative trends in the global economy, but rather immediate uncertainty. It is difficult for investors to make decisions if it is impossible to more or less accurately represent the consequences of their actions.
On this occasion, Javier Gomez, CEO of the investment company Myjoja Inversiones and co-founder of Aelca, at the real estate conference of the company Tecnitasa, pointed out that there is an impression that both buyers and sellers have almost completely distanced themselves from the market and have begun to wait. There is capital, there are opportunities, there is demand — but there is no certainty.
Sergio Espadero, Director of Real estate Consulting and Valuation at Tecnitasa, confirms that the first decision that investors have made in the current situation is waiting. He insists that the market has a lot of free money and investors remain willing to continue investing in Spanish real estate. Their operations are suspended, but not canceled. Espadero adds: «Uncertainty is manifested in the absence of transactions, but not in the valuation of assets». He believes that in the coming months, the cost of objects on the market will obviously fall, but at a fairly moderate pace.
At the same time, for Juan Antonio Gutierrez, CEO of Mazabi, the current situation is a period of new opportunities. In his opinion, not the most welcoming market situation is being formed now, which, however, opens up new investment options for more "brave" investors. But it is necessary to have a large amount of free liquidity in order to comfortably conduct investment activities.
Gutierrez is generally optimistic about the future, arguing that in the coming months the Spanish market is waiting for a long «journey through the desert», but it will inevitably lead to an «oasis». According to his estimates, uncertainty in the market, to one extent or another, will continue until September 2023. Javier Gomez supports this date, confirming that he considers the current situation as an extremely temporary crisis that will not take more than 6-12 months. Expander also agrees with the forecasts.
One of the reasons why all three expect the real estate market to revive in the second half of 2023 is the fact that Spain remains one of the main investment destinations in Europe, despite the fact that it is not as mature a market as Britain, Germany or France. Many investment funds have already conducted the second rounds of investments and again most of them were focused around investments in Southern Europe, primarily in Spain. It is popular with both institutional and private investors, large funds and even family businesses.
As for assets, according to experts, the most promising segments of the market for investment are: residential real estate for rent, the hotel sector, as well as student housing.