In 2022, demand for residential property remains almost the same as pre-pandemic levels. This will mainly happen due to the increase in demand for second-hand housing and, most importantly, due to the growing housing demand among Spanish people. As for new homes, by the end of the fourth quarter of 2022, prices for new buildings will rise by 4.4% at the national level. House prices will grow by 3.4% on the secondary market.
The market data described below was gathered and analyzed by the CBRE residential research division, a leading international real estate consulting and services advisor. This information was provided in a company report that examined all major sectors of the residential real estate market: student housing, co-living, land plots, rented accommodation, properties for sale, and housing property for people of retirement age.
So, according to CBRE, in 2022, the housing market will expand, prices will rise. But they will be offset by the growing gross disposable income of the population. On average, it usually takes 8.3 years for a typical Spanish household to purchase a residential home, on the condition that all the main income is spent on this acquisition.
CBRE's Javier Kindelan Williams, Head of Continental Europe Valuation & Advisory Vice President, says: “The real estate sector is going through a turning point in its history. 2021 was a fantastic year for real estate transactions. By all accounts, the same will be true in 2022. The macroeconomic outlook is good but not riskless. There is a stable and strong demand. Besides, Spain is still a market with relatively little supply compared to demand. This results in great potential for the residential sector.”
Housing leadership in build-to-rent (BTR)
Currently, the number of rented homes has reached 24.8% of the total number of accommodation units in the housing stock of Spain. CBRE estimates that the share of BTR units will grow to 27.3% by 2025. It means that more than 550,000 new homes will hit the sector. This will be driven by some socio-cultural changes in society and financial difficulties with the purchase of residential real estate.
CBRE noted the high interest among investors in acquiring land plots for the future development of BTR facilities. All this is happening while there is a lack of goods in the PRS segment (note: the private rental sector). Currently, only 5% of Spain's entire housing stock is available for rent and is held by the government. It is about 100,000 houses. This is quite low in comparison with the rates of other European countries.
It is estimated that the number of new homes for BTR will increase from 3% in 2022 to 13% in 2024 of the total offerings on the market. It was also known that in the first quarter of 2022, the segment of buy-to-invest real estate attracted 84% of all investments made in the residential sector of the country. This was about €959,000,000. About €738,000,000 is in the build-to-rent sector, and €220,000,000 is in the private rental sector.
Housing yields in Madrid and Barcelona remain constant at 3% and 3.25%, respectively. These figures are the same as in other major European cities, such as London and Stockholm.
Miriam Goycoechea, Head of Research in CBRE Spain, points out: “The ageing of the population, plenty of options, and human mobility will create new demand for the country's real estate, the backbone of the residential sector. These trends represent both challenges and opportunities for development. Good examples of opportunities are ESG, digitalization, improved regulation, and financing.”