Market Trends of Spain Condominiums and Apartments Industry
This section covers the major market trends shaping the Spain Condominiums & Apartments Market according to our research experts:
Rise in International Buyers in Spain
For many years, foreign retirees and investors have chosen Spain as the location of their dream home in the sun. British investors have been particularly drawn to it, and they continue to purchase most residences in Spain.
According to transaction data released by the Ministry of Transport, Mobility, and Urban Agenda, the number of operations to buy real estate in Spain by both residents and non-residents increased by 22.85% in the third quarter of 2022 to 32,701 operations, compared to 26,617 registered in the same period of 2021.
Starting in the third quarter of 2021, when more foreigners were allowed to enter Spain after the stringent measures to regulate access to the nation owing to the pandemic ended, the number of foreigners buying apartments once again reached pre-pandemic levels. Transactions did not dip below 16,000 since July 2021 over the course of the following four quarters.
Foreigner transactions exceeded 20,000 in each of the first two quarters of 2022, an absolute record. Foreign purchasers purchased 21,638 properties between January and March and 24,029 homes between April and June, exceeding this total. Registrars note in their study that "this is unquestionably a segment with a substantial growth tendency, which is helping to attain particularly important numbers in residential real estate activity."
The Germans (9.1%), the French (6.6%), the Belgians (4.9%), the Romanians (4.8%), the Dutch (4.8%), the Moroccans (4.9%), the Belgians (4.9%), the Romanians (4.8%), the Dutch (4.8%), and the Italians (4.6%) purchased the most homes.
With a share of about 8% of all international buyers in Spain during the second quarter of 2022, the British took the lead in this category. The second and third most common nationalities among overseas buyers were German and French, respectively.
To Prevent Rent Hikes, New Rent Control Measures are to be Implemented
Between Q3 of 2015 and Q3 of 2021, rental prices increased by more than 46%. Spain has adopted a plan to implement rent restrictions and raise taxes on some vacant homes in the nation in an effort to slow the country's recent rise in housing expenses.
The key elements of the housing bill are rent increases by landlords with numerous homes restricted; they are taxed more heavily, and it would be necessary for some new real estate developments to put aside some units for social housing.
Raquel Sanchez, Spain's Minister of Transport, Mobility, and Urban Issues, stated that it was important to battle the unjustified price rises, growing inequality, and degrading conditions that were present. The Minister said, "It is a route out of the maze where many individuals find themselves because they can't afford the home they want to buy or locate a home to rent at a reasonable price."
This comes after a government order that restricts rent hikes and broadens tenant protections and rights, which took effect in March 2019. The measure, among other significant changes, increases the length of the rental agreement from three to five years (or seven years if the landlord is a business entity), caps annual rent increases at the rate of inflation within the contract period, and introduces a state benchmark index for rental prices that will be used to assess the state of the market. For leases signed after March 6, 2019, the aforementioned law is in effect.
