2021 has been a year of recovery, and as travel restrictions were lifted and vaccine programs advanced, international and Spanish buyers have looked to acquire Spanish properties and as a result, 2022 has seen strong results across the board.
Sales have soared and, in some areas, are back to pre-pandemic levels. Prices have also increased again with newly built properties.
Economic scenario in 2022
In a generally positive context for the Spanish property market, there is also widespread optimism for the economy. This year Spain has experienced solid GDP growth and has just received billions of euros in European funds, which constitutes a huge injection in the country’s balance sheets.
In addition, household savings have returned to pre-crisis levels. Bankinter’s latest analysis for the real estate sector in Spain forecasts that household savings will continue to increase in 2022, so greater liquidity among buyers seems likely.
Property prices in Spain
So what does a buoyant economy and housing market mean for home prices next year? The 2021 trend was upward and everything indicates that 2022 will see a similar scenario. Bankinter currently forecasts a 2% price rise overall next year. It is estimated that the rebound will be greater, particularly in the most requested parts of Spain.
There is certainly plenty of room for growth as Spanish property values remain well below their peak reached in 2007. According to Tinsa’s latest market report, they stood at -29% in October this year. Also, with interest rates still at record lows, few investment products offer the same returns as real estate.
Sales of Spanish real estate in 2022
With savings at pre-crisis levels and the Euribor mortgage interest rate still below zero, everything points to strong housing demand next year. Bankinter forecasts some 500,000 operations, figures similar to those seen for the last time in 2007. Of these, 400,000 would be second-hand sales and the remaining 100,000 for new construction.
Land sales will continue to experience strong growth. Purchases in this sector have risen by around 45% so far this year, a rate that has pushed up land prices in Spain by 11%. Bankinter expects more moderate increases in land prices in 2022 but continuity in demand.
New lifestyle trends instigated by the pandemic have fueled demand for new build properties. These offer larger homes and higher quality finishes, both of which are highly sought after features among homebuyers.
Bankinter says the market could easily accommodate 100,000 new additions next year after 90,000 this year. The figures are in stark contrast to 2013, when development of just 34,000 new properties in Spain began.
The advance of digitization
Experts explain that the arrival of the pandemic has changed the way we live and, therefore, the type of home we need; another of the factors that have facilitated the high increase in transactions in the real estate market. Therefore, technology is positioned as a key link to respond to the new needs of both buyers and sellers.
According to the latest Casavo report, 86% of Spaniards living in Madrid and Barcelona who were in the process of selling a property throughout 2021, stated that they turned to real estate operators. Whether the sale is made on their own account or through the intermediation of a real estate operator, what seems evident is the use of digital channels to advertise the home. 81% of the operators opt for internet platforms and pages, a solution that is also chosen by 77% of the sellers who decide to manage the sale on their own.
Why wait until 2022 in real estate?
Everything within the broader economic context points to a strong year for Spanish real estate in 2022. And with prices and demand continuing their upward trend, it makes financial sense to buy now rather than wait until next year.
If you want to take a look at what is on the market on the island of Tenerife, contact our team of experts. They will be happy to advise you on the best location and the property that suits you best.
Source: El Economista