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The real estate market gains momentum with more than 9,000 sales

The real estate market has closed 2021 with clear signs of recovery, after a 5% decrease as a result of the pandemic. According to official figures, until November, 8,200 sales operations were carried out, and forecasts suggest that 2022 will close above 9,000. This is 30% more than a year before, according to data from the General Council of Notaries.

The ease of financing that banks are currently providing, together with low interest rates, are factors that explain the current dynamism of the real estate market in the Canary Islands. To this must be added the savings of households, the improvement in consumer confidence and the need that the pandemic has discovered for larger homes with open spaces.

What’s behind the growing demand?

The demand is formed above all by residents, among whom there are people looking for their first home, and others who, after covid, have decided to change their home. The pandemic has generated new demand and supply, since these are people who sell their homes to buy others. To this demand we must add the foreigners who in 2021 returned to the real estate market of the islands.

Small investors who want to acquire flats as a ‘refuge’ of profitability before other forms of investment are also added. Renting a home on the islands can yield a return of 6% compared to 0.3% given by ten-year government bonds, for example.

The projections for the next months of the year

For the coming months, the real estate sector is confident that the market will maintain its current dynamism. However, problems could arise in relation to the lack of supply of new housing. In 2021, the construction sector boomed, offering the market some 3,500 homes. It is expected to continue at the same pace to respond to demand and prevent prices from being excessively stressed.

One of the peculiarities of the purchases that are currently being made is that many are made with their own resources in their entirety, without closing a mortgage, or partially, resorting to credit in a small percentage.

Prices rise 6% and will continue to rise in 2022

Housing prices have risen in 2021 between 4% and 6%. In the second case, the rebound has been greater due to the rise in the price of raw materials. According to Tinsa data, the average price per square meter on the islands is 1,376 euros. The figure assumes that it is still 28% below maximum prices. From the lows, they are up 20%.

By province, Santa Cruz de Tenerife has experienced a greater increase, of 10.9%, while in Las Palmas the rise is 5.2%. By capital, the city of Las Palmas de Gran Canaria presents a higher price, of 1,526 euros, while in Santa Cruz de Tenerife, the square meter stands at 1,394 euros. Prices are expected to continue to rise slightly throughout this year, although the experts consulted reject the possibility of a new bubble.

From the Official Association of Real Estate Agents, it points out that there is no prospect that the market will overheat or become tense in the coming years and they completely rule out the possibility that Spain will once again plunge into a real estate bubble situation.

If you are thinking of buying or selling a property and need professional advice, contact us and we will manage your request.

Source: Canarias7

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Servihabitat foresees more than 500,000 home sales in Spain

Servihabitat Trends foresees a 5% growth in property sales in Spain. In this sense, more than 500,000 operations are estimated based on the demand that has been in the residential market in recent months. The report also concluded that the Spanish residential market will maintain a positive trend in the coming months, which also confirms its speedy recovery.

The forecast for the coming months

The CEO of Servihabitat, Iheb Nafaa, stated that the real estate sector and the property market will have a positive trend. “The forecast is that the sector will continue with the same positive trend, and even more so if the different factors that can continue to drive the market are taken into account,” he added.

The positive economic outlook and the arrival of European funds, among other factors, show an improvement forecast in the macroeconomic projections for Spain. Thus, GDP growth of 6.4% is expected in 2021, one of the highest in the entire European Union. Consumer confidence also shows a positive trend, surpassing the data reached at the end of 2019 by more than 13 points.

On the other hand, the general director of Servihabitat’s wealth management business, Juan Carlos Álvarez, stated that investment in wealth will continue to offer interesting returns with rates of 7.6%. This despite the slowdown in the evolution of the rental market with respect to the sale market.

Currently, household real estate wealth is at a decade high. 85% of Servihabitat’s network of collaborating agents (APIs) now share a more optimistic view than six months ago, where only 56% of collaborators shared that there would be a growth trend.

Slight rise in house prices

The real estate service also forecasts an increase in the price of housing of 1.4% at the end of the year. He predicts that the new construction, despite having presented a better evolution in recent months, will experience price adjustments. These forecasts are in tune with those made by economists, consultants and real estate agents, who affirm that, given this scenario of rising prices, we are at the best time to buy a home.

The new construction, despite having presented a better evolution in recent months, will experience contained adjustments in the price, so it will show a much more stable perspective. In this way, in annual rates, the differences between new and second-hand housing will be less pronounced than last year.

The rental market after the evolution of the pandemic

Rental demand showed a slight drop, presenting a special sensitivity to the evolution of the pandemic in large cities. The number of households that are rented is around 19% on annual average, a figure close to that of 2019.

By type of housing and location, spaces open to the outside continue to be prioritized, and interest in renting outside the most central areas continues to grow, according to the opinion of the Network of collaborating agents (APIs) of Servihabitat.

The rental price showed a decrease in the annual variation rates since the beginning of the year, after the resistance shown in 2020, when it experienced a trend towards moderation. It is stated that this variation is due to the drop in demand and the increase in supply, also conditioned by tourist restrictions.

The real estate sector remains attractive to investors

The real estate sector remains one of the most stable and profitable in the last decade. This offers the investor returns of 7.6% if the revaluation of the property is added to the average return generated by the rental. Although the situation of stock values ​​has improved, it is expected that in the coming months there will continue to be volatility in the markets.

Regarding the investor profile, about 74% of the operations are carried out by small investors, which grew almost five percentage points compared to a year ago. In the last year, the average ticket per operation was concentrated mainly in the range of less than 200,000 euros.