Although it may not seem very obvious, real estate is a fairly liquid commodity and allows you to quickly get your hands on money. In fact, within the framework of the Spanish market, it is possible to find a buyer for a newly put up for sale object literally within a couple of weeks. Add to this a month for the sale procedure and the money is already in your bank account.
Old or new real estate, renovated or in need of renovation, purchased or inherited. Almost any product sells out like hot cakes, for which you can largely thank the abundant foreign demand. From the point of view of investments, real estate is one of the safest and most profitable assets today. It is successfully used today both for passive rental income and for resale.
Given the historically high rates of inflation, real estate is also constantly getting more expensive in price, undergoing regular revaluation based on inflationary growth. At the same time, high prices and lending rates of 3-4% do not deter foreign buyers, for whom Spain is still one of the most profitable markets in the EU.
Jose Maria Cervera, CEO of Renta Corporación, a real estate buying and renovation company, points out that current forecasts indicate that prices will continue to rise, but foreign demand will also continue to grow. In addition, the growth of interest rates is likely to slow down, so the domestic buyer may return to the market en masse.
The last few years have been very positive for the real estate market, especially for the largest and most popular destinations. So, in 2022, Barcelona attracted investments in the real estate market in the amount of 3.6 billion euros.
Experts note that prices will reach their peak before the end of the first half of the year and a gradual decline will begin, so investors have a few more months to try to make money on speculation. At the same time, the decline should not be sharp and may be delayed until the end of 2023. It is also emphasized that despite all the risks, the situation of 2008 will not be repeated. This is excluded, including the central bank of Spain.
Why sell real estate?
There are several reasons that can lead to a decision to sell a property. Renta Corporación identifies four main reasons:
- The housing was inherited and does not need a new owner. In some cases, several people inherit the property, and a conflict of interest may arise. In such cases, it is best to sell the asset and divide the profit received as a result of the operation.
- Relatively urgent need for a large amount of liquidity. Real estate assets are one of the best and fastest ways to get money in this case, as we have already said earlier.
- The property at the disposal forces the owner to bear high operating costs. Even an unused object requires investment of financial resources, physical effort and time. The older the building, the more funds will need to be spent on its maintenance. And this is all without taking into account regular interaction with the state and its regulators.
- The real estate that was purchased for rent began to lead to too high costs for management and work with tenants. The services of a separate management company may be too expensive for the owner, and he himself is no longer ready to spend his time and effort on such economic activities.
Most often, these four factors are the reasons for the appearance on the market of a large number of new objects for sale. Is the economic situation deteriorating and the incomes of the population falling? Most likely, there will soon be enough new objects that have been exhibited by people who urgently need money on their hands.
Has the mortality rate increased? For example, in view of some pandemic, most likely many people will inherit new real estate, which they have neither the strength nor the interest to monitor. Again, it is worth waiting for the appearance of a new offer on the market.
These factors are a good starting point for tracking and forecasting real estate shortages and surpluses in the market.