By Patricia Malagón for DirigentesDigital.com
Experts predict a slight correction in prices, but only in some areas and cities.
Real estate investment is, without a doubt, the favorite among Spaniards, where close to 77% of the population owns a home. For this reason, the evolution of this market has a special relevance in the Spanish economy. However, the change in the monetary paradigm, where rates have gone from 0% to 3% in nine months, has been especially affected due to the rise in mortgage prices and the greater difficulties in obtaining financing. Even so, the Spanish housing stock is insufficient to meet the existing demand. And, according to Savills Aguirre Newman, Spain will need 2 million new homes in the coming years to meet demand. With all this on the table, it is worth asking, what will happen to real estate in 2023?
The scenario for 2023
The housing and rental market comes from consolidating a 2022 with widespread increases. “For this 2023 it will depend on how macroeconomic factors or the war in Ukraine behave. There will probably be moderate adjustments in lower-middle-level housing in secondary cities mainly due to the rise in the general cost of living. On the other hand, housing in prime areas of the main cities will continue to consolidate its growth, but at a slower rate”, comments Íñigo Torroba, CEO of Civislend, leaders in real estate crowdlending.
And it is that, although a slowdown in sales is expected – forecasts suggest that the year will end with around 500,000 compared to 600,000 in 20222 – the fall does not seem to be, far from it, pronounced or widespread. Although, according to Lorena A. Zenklussen, CEO of Comprarcasa, "it seems that 2023 points to a change in trend. The reason: since the arrival of autumn, with the increase in interest rates, we are seeing a slight moderation and reduction in the demand for housing, contrary to the supply, which is generally maintained”.
Thus, a moderate contraction can be expected in closed operations and in housing prices, but far from the large falls seen during the previous crisis. In fact, the price per square meter of new construction is already at all-time highs. "You cannot expect a major correction in the market because there is a lack of supply," says Anna Puigdevall, treasurer of FIABCI Spain and general director of the National Association of Real Estate Agents (ANAI).
2023, a year to buy or to wait?
Precisely, this lack of housing supply is the main condition that will prevent prices from suffering a great fall, just a slight correction, although as Puigdevall explains "it depends a bit on the needs and the areas in which we want to buy, if We were in a moment of oversupply, I would say that we would have to wait. But, at a time when we have little supply, it is surely good to wait relatively little. It is better to negotiate the price of a property, than to wait because the offer is still limited”.
For Torroba, this may be a year in which specific opportunities arise that brick investors can take advantage of. “In times of uncertainty and turbulence, opportunities always arise. This time I don't think they will be so clear, but we will have to be attentive to see which sectors are most vulnerable. It will depend a lot on the investor profile and you have to keep in mind when investing the financial costs on the rise since the price adjustment can be reflected in the cost of financing ”, she adds.
Where is it more profitable to invest?
Although the residential seems the preferred option to later dedicate it to rent or sell the house over the years, taking advantage of a potential revaluation, there are other sectors in which a good opportunity can also be caught to obtain interesting returns.
“From Comprarcasa we have noticed that part of the demand from investors, for example, is beginning to move to medium-sized cities or also towards the purchase of premises or office spaces. Above all, those who have the possibility of changing their use to housing, there are very interesting opportunities if we talk about the gross profitability of the purchase and conditioning and then renting, as long as the margins and investment term are controlled very well", says Zenklussen .
For his part, Francisco Nomdedeu, member of the General Council of COAPIs in Spain, comments that although residential, and within this, medium-sized housing, "which is the most sought after both for sale and for rent, and It is the one where the greatest number of transactions are carried out and with the most frequency. Investments in plots, buildings and shops would be more profitable for more specific situations and locations”.
Thus, the summary for this 2023 is that there may be a correction in prices, but moderate. Therefore, it is not possible to expect large falls and clear opportunities to arise as occurred in the previous economic crisis. Although, as the experts consulted have pointed out, the evolution will depend on the market segment and the geographical area of Spain.
Source: www.dirigentesdigital.com