According to real estate analysts and trend watchers, residential properties in Spain will become larger, more luxurious and more energy efficient. What is the price tag for that? Will the demand for a place under the sun continue to rise? And doesn’t that mean we’re in a bubble? We put our magnifying glass on Spanish real estate trends for 2022.
Apartments in villa format
You thought the pandemic would make foreigners less eager to spend much time abroad? Miss, Puss! On the contrary, corona made us realize what is really important in life. And more enjoyment is guaranteed to be part of that. Every 2.5 hours a Belgian buys a (second) stay in Spain, Het Laatste Nieuws calculated.
At the same time, regions like the Costa Blanca are struggling with land scarcity. Certainly near the most beautiful beaches. Everyone wants to watch the sun sink into the sea from their balcony. Everyone wants to be able to crawl to the beach if need be. North of Denia, construction promoters can no longer start projects. Although the scarcity is not only a result of the popularity of real estate on the coast, but also of policy. To avoid building too much or too fast, local governments freeze land. In this way, they hope to avoid a real estate bubble and leave enough open space.
Property developers are looking for other ways to give their customers value for money. By betting on apartments that will compete with the better villas. Which are often the same size and offer at least as much luxury and comfort, sometimes even more. The Last News gives the example of buyers with a budget of half a million. Whereas before they would have ended up in a villa, now they buy an apartment of a similar size, with three bedrooms, two bathrooms and a spacious terrace. Which brings us to the following.
Larger terraces and gardens
During corona, we were locked in more often than we liked. Now that the pandemic is on its last legs – holding wood – people want to (re)breathe. Developers are responding by building buildings further apart. And by providing larger outdoor spaces. In addition to an ordinary terrace, an apartment will then have a roof terrace, for example. Ground floor apartments can often count on larger gardens. Space is one of the most important real estate trends in 2022.
Luxury is the highest good
Corona has an impact on our lifestyle. Buyers are currently looking primarily for large homes with high levels of finish. These thus end up primarily with new home owners. We are all looking for a touch of luxury. The high-end real estate market held up smoothly during the pandemic, thanks mainly to demand from abroad. Supply continues to outstrip demand, causing prices to rise for the past year and a half.
Learn why it’s better to buy a new home than a used one.
More energy efficient
By 2050, all homes in the EU must be zero-energy. Spain is already betting on this. By imposing standards when issuing building permits. And by effectively controlling those in the yards. Insulation plays a key role in achieving the ambitions. In a country like Spain, it shouldn’t keep out the cold so much as the heat. And thus reduce the energy consumption of air conditioning. Not only exterior walls receive a hefty layer of insulation, but also ceilings and floors. In addition, governments are increasingly mandating solar panels on homes. These warm up the water.
What about the prices?
The outlook for the Spanish real estate market is good. There is economic optimism and the gross national product is rising. People’s savings books are also fat – and are expected to keep rising. Potential buyers therefore have sufficient liquidity.
Do those real estate trends lead to higher prices in 2022. Perhaps. Bankinter predicts a two percent price increase in 2022, but it could also be more. Especially in the most coveted areas, such as the west of the Costa del Sol.
There remains ample room for growth. The real estate market is still camped out well below its 2007 peak. Because interest rates remain historically low, few investments are as lucrative as real estate. Bankinter expects about half a million transactions by 2022. 20 percent of that revolves around new homes.
Are we headed for a new real estate bubble?
After studying real estate trends for 2022, Spanish newspaper El Pais recently pondered this question. It concluded: no.
Yes, homes are going to get even more expensive in 2022, in part because of the pick-up in economic growth and rising inflation. But economists say that doesn’t mean a bubble is in the making.
Ignacio de la Torre, the chief economist at financial advisor Arcano Partners, compares the situation in 2006, just before the Spanish real estate crisis, with the situation today. “The scenario is completely different,” he says. “In 2006, families spent 46 percent of their income on paying off their homes. Now it is 30 to 32 percent. Only from 35 percent on do we speak of a heated market.”
Spain has learned from its mistakes. The excesses are out. For example, another 750,000 new construction projects were started in 2006. By 2021, there were only 100,000. So for a new real estate bubble, we should not fear in 2022.