Vigo residential real estate market is recovering, and sales are growing

Vigo residential real estate market is recovering, and sales are growing

The real estate sector of the city of Vigo has entered a phase of active recovery and general optimism. This is observed in its most diverse segments: marketing, sales, construction, investment. It is safe to say that the local market is emerging from the pandemic crisis, which is reflected in the available statistics. It is especially worth noting the increase in rental rates, which motivated many to switch to buying residential real estate, although this mainly concerns apartments from the secondary market.

Javier Garrido, President of Apron, spoke about the prospects of Vigo real estate market. He points out that there are currently no problems with the sale of goods, except for some increase in fears on the part of buyers about price increases. These concerns are really justified, since the rising cost of construction, inflation, rising energy prices and many other global problems are real factors in the modern economy. All this is superimposed on the natural growth of prices and rental rates in view of the recovering demand.

Nevertheless, Garrido hopes for an early stabilization of the market, as so far there is a significant excess of demand over supply. This is especially noticeable when compared with previous years, when, in principle, it was quite difficult to talk about the existence of any customer base in the region. People accumulated funds during the pandemic and, at its end, abruptly returned to the market with a great desire to invest their accumulated savings somewhere. And since the growth of interest rates is almost on par with the growth of rental rates, more and more people prefer to buy real estate. Pay more now than pay more in the future.

Many companies in the sector confirm the indicated trends and report problems with a lack of supply to meet the prevailing demand. The market movement is very strong, it affects both elite sectors and affordable real estate. Even despite the increase in mortgage interest, sales are growing extremely actively, both buyers and investors are entering the market. Since spring there has been a high demand for beach areas for summer holidays.

However, the chairman of the Galician Employers' Association Fegein, Benito Iglesias, notes that there are very few new housing on the market, housing that is in great demand. In view of this, the prices for the available supply are growing at an amazing pace. The purchasing power of existing demand is as high as ever and this leads to overheating of the market. So far, the situation is being stabilized by a large supply of secondary residential real estate, but its stock is not as large as many would like.

Among the new properties on the market, only the most expensive objects remain, such as apartments in Barrio do Cure — prices for them start from EUR 600,000. Few people can enter this market. There is also a significant real estate bias towards the resort sector. At the same time, Javier Garrido notes that the main reason for anxiety about the future of the market, among developers and real estate agencies, is the rise in prices for building materials, as well as the rise in rental rates.

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