Outlook on the Spanish Real Estate Market in 2021

Agora MLS, a real estate association of which we are pleased to be members, has published a detailed report analyzing the Spanish real estate market during the first half of 2021 and also offering a perspective on the second half of the same year.

The professor, analyst, and economic consultant Gonzalo Bernardos has been in charge of preparing this detailed and interesting report.

At KM2 we have prepared a summary with the most outstanding points.

Prospects for the real estate market in Spain 2021: first semester

Professor Bernardos points out that the housing market after the crisis caused by the pandemic has suffered a light recession due to the following aspects:

1. The main protagonist of the economic crisis has been tourism, with the real estate sector being a secondary actor.

2. Decreasing offer. In February 2020, large and medium-sized cities already had a small stock of homes pending for sale.

3. Bank’s solvency. Banks have acted prudently by carefully selecting borrowers, without actually closing the credit tap.

“A substantial part of banking entities considered that the granting of mortgages could improve their income statement and sought to grant more loans to families with proven solvency.” The result? Spaniards have been able to access the cheapest mortgage loans in history.

4. Very low-interest rates. Something that has encouraged many tenants to stop renting and choose to buy, paying much less for the mortgage payment than for the lease.

5. New source of demand. Many solvent families, whose income has remained stable, have had the need to change housing. On the one hand, some have wanted to acquire a home in the same city, but with more m2, more light and outdoor areas. And, on the other hand, others have preferred to bet on a home far from the city, houses or apartments in residential areas with gardens and pools.

6. New needs. Greater contact with nature, a calmer life, a more comfortable environment and the possibility of teleworking have been the main factors behind the good behaviour of transactions in the peripheral areas.

In conclusion, he points out that “surprisingly, the residential market has only suffered a slight recession during the last sixteen months.”

Real estate situation in Barcelona

The report also details a forecast of the real estate market in Barcelona.

Contrary to what one might think, Barcelona will become a great beneficiary after the disappearance of the coronavirus.

Foreign demand will return and Catalans will invest part of the savings they have accumulated over the past year in new properties.

In terms of price, everything indicates that it will increase slightly above the average of the country, approximately 7%.

What are the forecasts for the second semester?

As Gonzalo Bernardos points out, “The massive vaccination and the economic rebound generated by the decrease in mobility restrictions will provide families with the necessary optimism to substantially increase the acquisition of homes.”

In addition, it highlights that “if European funds boost GDP for part of the current decade and the ECB’s reference interest rate continues to be low, the main impact will be the arrival of a new real estate boom in the coming years.”

If you have been wanting to delve a little more about the situation of the real estate market, the most demanded assets, the evolution of prices and the new real estate boom that is expected in the coming years, we encourage you to download the full report here.