The Spanish real estate sector is withstanding economic and political uncertainty, not to mention the continuous rise in interest rates. INE data indicated that over 315,000 sales transactions were made in the first half of 2023.
Likewise, prices are reluctant to fall, to the point of surpassing historical peaks before the 2008 property bubble. That is why experts from Unión de Créditos Inmobiliarios (UCI) – specialists in sustainable financing – have analysed seven trends that will mark the most immediate future of the real estate market.
Seven keys to the future of real estate
In 2024, the real estate market will be marked by the growing importance of sustainability, the emergence of artificial intelligence (AI) and increased international investment in the residential sector.
- Uncertainty stemming from inflation and rate hikes, as well as the political and business context, will be key for the sector. Moreover, we are reaching a turning point that pits those who believe that a pause in monetary tightening is necessary against those who believe a further rate hike is needed.
- Environmental, social and governance (ESG) criteria are becoming more prominent and relevant and will be increasingly integrated into real estate market decisions. Environmental and social factors are becoming more valued by investors in their business strategies.
- The climate emergency and the need for building retrofitting are becoming more prominent, especially after the hottest summer on record. All this has prompted spaces to start adapting to be sustainable and resilient. Furthermore, the future approval of the Energy Performance of Buildings Directive (EPBD) will lead to the phasing out of fossil fuel heating, and could open up the possibility of requiring a certain level of efficiency in housing.
- Investors are focusing more on residential than commercial properties, especially as this is the core of the real estate market. This trend is expected to continue through 2024.
- International investors are beginning to take a closer look at the Spanish residential stock. Not surprisingly, the amount of purchases by resident and non-resident foreigners represents 14.9% of homebuyers in Spain. This has become the second-best result in history, only behind the third quarter of 2022, when 15.9% was recorded.
- Artificial intelligence continues to gain prominence in the real estate market, with many professionals, asset managers and investors using it to predict prices and market behaviour. In addition, many experts believe that it will also help include increasingly important technical solutions, which will force estate agents to adapt to new technologies.
- New formulas that seek to respond to housing needs, such as coliving or cohousing, will be more important, without forgetting Build to Rent (BTR) projects and public-private initiatives for social rental housing in the autonomous regions.
José Manuel Fernández, UCI's deputy general manager, pointed out that all these data suggest that we are "entering a new phase for the housing market", which will be characterised by "changes in demand, as well as a growing interest in sustainability and the environment".