The number of people who want to buy property in Spain in 2021 has increased, and the main question that buyers are interested in, what are the prices of property this year and what is better to buy? Coronavirus has made a big change to the property market in the world and it is unclear what to expect in the coming years and whether there will be an opportunity to sell at least at the purchase price. In this article you will learn about the average cost of housing in Spain this year and what to expect next.
Trends in the pandemic
The pandemic coronavirus has made changes in every activity of the state, it had to rearrange all the mechanisms of the new format to avoid further spread of the disease. The real estate market was not left out. Property prices have always been influenced by many factors, even the most minor ones: trends in bright or basic colours, the location of housing (in crowded areas or vice versa), the number of floors in a building, the year it was built, etc. In turn, the pandemic has also made potential buyers reconsider their priority desires when choosing a flat, which has raised the price of some apartments.
One would think that as buyers’ purchasing power has plummeted and borders between countries have been closed for almost a year, home prices should be lower. But, according to estimates by Idealista, average house prices in Spain, compared to 2020, have risen by 0.9%. And prices are expected to rise further.
The reasons for the changes in the Spanish real estate market
Construction freeze
As in Russia, in Spain because of the pandemic coronavirus have stopped most businesses, and this affected the activities of developers. Construction work was initially frozen for some time, and later, when permission to continue work was given, changes were made. In order to comply with sanitary regulations, and to avoid the spread of disease, construction workers were made to work wearing masks and gloves, and also to keep a social distance. As a result, construction costs were increased (purchase of all sanitary materials) and the speed of building the houses was decreased.
This has resulted in developers stopping work, freezing construction again indefinitely and more than half of the newly built houses never being offered for sale. The prices of new buildings were expected to decrease, and the cost of new buildings was at its highest point in 2020 – 2472 euros per m2.
Changing desires of the buyer
The needs of potential buyers have changed because they do not want to appear in crowded places and are more concerned about their health. Whereas previously young families would look for a flat in crowded areas with lots of entertainment or close to kindergartens and schools for their future children, now the priority is smaller houses further away from crowded areas.
There is a trend among locals to move to the countryside, preferably closer to the sea and nature. This decision has also been influenced by an increase in the price of new buildings.
Small houses with terraces or balconies, with large windows that give a lot of light into the room, have also become in high demand.
Urgent sales
The trend of quick and urgent sales in Spain has been very much in demand. The reason for this is the large number of victims of the coronavirus pandemic (large percentage of victims among the elderly). The heirs to the property were trying to sell the house or flat as quickly as possible as they were not prepared to maintain another home (and most probably did not have the funds to do so).
On real estate websites there were often advertisements for urgent sales. Another reason for this was the mass move of locals from large cities to sparsely populated areas.
Remote sales also became widespread. Most real estate agencies now offer remote sales, where all questions, and as a result the purchase and sale of the home itself is done remotely.
Only such a sharp redirection to the remote format has allowed the Spanish property market has not collapsed completely.
The priority of renting
Due to the unstable economic climate and the uncertain future, most home buyers have postponed this decision indefinitely. The timing of the pandemic was indeed unstable and the decision not to invest large sums in real estate, consider it reasonable.
Therefore the demand for rental properties or rooms has risen sharply (+63% for homes, +80% for rooms). As a result, rental prices reached their ceiling of 11.4 EUR/m2 by August 2020.
