Spain's residential real estate market is poised to record a CAGR of more than 10% during the forecast period.

Following the pandemic's catastrophic shock, the Spanish economy improved substantially throughout 2021. With a decline of about 16% in the last quarter of 2020, La Rioja was the Spanish region where the pandemic's impact on real estate values was greater than the previous year. The autonomous city of Melilla was the only place in Spain where there was an increase in comparison to pre-pandemic data.

In 2021, housing in Spain had become more expensive, contrary to what many experts expected a year ago. In 2021, there were roughly 100,000 home starts, similar to pre-pandemic levels but significantly below the levels seen at the turn of the century. In 2006, the number of new units soared to over 750,000.

In 2022, it is expected that housing will continue to become more expensive as a result of economic growth and inflation. Though the European Central Bank (ECB) has warned of "exuberance" in the housing market - a phrase chosen to replace "bubble", it appears to be referring to housing markets in other nations rather than Spain.

Spain's real estate industry, particularly in terms of demand, has shown a fairly good trend in this period of economic recovery. Home sales are also reviving remarkably quickly. By October 2021, 468,000 transactions had been executed, an increase of 35.9% over 2020 and 8.3% over 2019. The general improvement in demand, along with developers' restricted ability to respond and as a result of a slower recovery in supply, is creating a general upward trend in housing prices, particularly in the new-build market.

Prices have been on an increasing track throughout 2021 because Y-o-Y rates bottomed out between Q4 2020 and Q1 2021 (depending on the price indicator). According to the available data, prices increased 7.4% Y-o-Y in Q3 2021.

Key Market Trends

Rise in International Property Buyers in Spain

Spain is a popular international destination for visitors, investors, and those looking to relocate to the country. It is a safe and stable country with a rich cultural tradition. International interest from buyers both inside and outside the European Union is increasing.

Real estate has regained popularity, especially in seaside resorts and Spain's major cities. In terms of investment, Madrid, Valencia, and Malaga are the provinces with the highest possibilities for recovery.

Other places, on the other hand, are expected to recover quickly. The Balearic Islands and Barcelona, for instance, are two of the most popular tourist destinations in the world. British property buyers and especially British retirees were the foreign nationals who contributed the most to real estate investment in Spain. Now the situation has changed, and many are selling their properties.

In the second quarter of 2021, the British continued to lead the investment rankings, according to the Land Registry, accounting for 9.5% of total purchases in the country. The total number of foreign buyers in Spain in the second quarter of 2021 was just over 13,600. While the numbers of foreign buyers are still below pre-pandemic levels, data from the Spanish Land Registry (Registradores) shows that the proportion of foreign buyers across the country as a whole increased by 0.23 percentage points, from 9.52% in the first quarter of 2021 to 9.75% in the second quarter of 2021, suggesting that international buyers are beginning to return.

Despite the inevitable complications with both Brexit and the COVID-19 pandemic, foreign interest in Barcelona appears to have remained strong, with the data from the Spanish Registrars Association (Registradores) showing that foreigners accounted for 8% of total sales in Barcelona Province in the third quarter of 2021, compared to 4.5% in Madrid. In 2022, a tangible increase in home sales is expected in the tourist regions of Spain, where a significant proportion of buyers will be foreigners.

Housing Sales Growing Substantially in the Country

The sale of dwelling homes in Spain increased by 38.1% in 2021, reaching 676,775 units, and the average price per square meter increased by 5.3% to EUR 1,507 per square meter, while mortgage loans for housing acquisition increased by 35.7%. Flat sales climbed by 38.2% Y-o-Y to 507,209 units, while single-family home sales increased by 37.8% Y-o-Y to 169,566 units in 2021. The prices of flats had an increase of 3.6% in 2021 compared to 2020, reaching EUR 1,701 per square meter, while the price of single-family homes averaged EUR 1,195 per square meter, registering an increase of 10%.

For the first time since 2014, the sale of brand new houses exceeded the barrier of 100,000 operations. There were exactly 115,038 sales, according to the INE, 37.7% more than in 2020. In 2021, on average, seven autonomous communities saw their operations rise by more than 34.6%. Valencia, Castilla-La Mancha, Castilla y Leon, Madrid, Cantabria, Andalusia, and La Rioja were among them. The latter saw the most significant increase, with 42.7% more properties sold than in 2020. The Basque Country, on the other hand, saw an annual gain of 15.8%. According to the statistics on transfers of property rights from the National Research Institute (INE), the sale of houses has increased by 40.6% in September 2021 compared to September 2020. In the first nine months of 2021, home sales increased by 37.6%.

Competitive Landscape

The Spanish residential real estate market is competitive with the presence of property developers like Neinor Homes, AEDAS Homes, Via Celere, and AELCA. The market has also witnessed the entry of new players like Kronos Homes and Q21 Real Estate Market. The growing presence of international funds and foreign capital is increasingly attracting domestic developers to have joint ventures as a way of gaining a foothold in the country and enhancing their financial strength and management expertise. Recent examples of these ventures include HIG and Monthisa, Pimco and Lar España, and KKR’s partnership with Qubit. The market recovery in Spain's residential real estate is expected to continue, which is anticipated to attract more players to enter the market.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

• 1 INTRODUCTION

  • 1.1 Study Assumptions

  • 1.2 Scope of the Study

• 2 RESEARCH METHODOLOGY

• 3 EXECUTIVE SUMMARY

• 4 MARKET DYNAMICS

  • 4.1 Current Economic Scenario and Consumer Sentiment

  • 4.2 Residential Real Estate Buying Trends - Socioeconomic and Demographic Insights

  • 4.3 Government Initiatives, Regulatory Aspects for Residential Real Estate Sector

  • 4.4 Insights into Size of Real Estate Lending and Loan to Value Trends

  • 4.5 Insights into Interest Rate Regime for General Economy, and Real Estate Lending

  • 4.6 Insights into Rental Yields in the Residential Real Estate Segment

  • 4.7 Insights into Captial Market Penetration and REIT Presence in Residential Real Estate

  • 4.8 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, Property Management)

  • 4.9 Market Dynamics

    • 4.9.1 Drivers

    • 4.9.2 Restraints

    • 4.9.3 Opportunities

• 5 MARKET SEGMENTATION

  • 5.1 By Type

    • 5.1.1 Apartments and Condominiums

    • 5.1.2 Villas and Landed Houses

  • 5.2 By Key Cities

    • 5.2.1 Madrid

    • 5.2.2 Catalonia

    • 5.2.3 Valencia

    • 5.2.4 Barcelona

    • 5.2.5 Malaga

    • 5.2.6 Others

• 6 COMPETITIVE LANDSCAPE

  • 6.1 Market Concentration

  • 6.2 Company Profiles

    • 6.2.1 MetroVacesa

    • 6.2.2 Neinor Homes

    • 6.2.3 AEDAS homes

    • 6.2.4 Via Celere

    • 6.2.5 AELCA

    • 6.2.6 Acciona Inmobiliaria

    • 6.2.7 KRONOS

    • 6.2.8 Pryconsa

    • 6.2.9 Q21 Real Estate

    • 6.2.10 Quabit Inmobiliaria

    • 6.2.11 Halcyon Properties SL

    • 6.2.12 Home Select International

    • 6.2.13 Mallorca Majorca Property Sales

    • 6.2.14 Spainhouses.net

    • 6.2.15 Spain Homes*

• 7 FUTURE OF THE MARKET AND ANALYST'S RECOMMENDATIONS