At the end of last year, experts gave us their real estate conclusions. Investment in real estate in Spain was weighed down by rising interest rates, political uncertainty and the Housing Law, although it did benefit from stock market instability and foreign investment. Experts expect investment volumes to improve in 2024 if there is less uncertainty.
Iñaki Unsain, a real estate 'personal shopper' believes that there may be a slight upward trend in the volume of investments due to the somewhat turbulent situation in the stock market but nothing without it being a crucial boost, "given that people who buy with a need for financing have seen how conditions have tightened and with rates above 4% are acting with a caution that will begin to decrease when rates stabilise to a lower level than at present".
On the other hand, stock market instability and inflation mean that investment in housing is seen as a refuge by many investors, who have shifted their attention to the real estate sector.
For Gerard Marcet – founding partner of the real estate consultancy Laborde Marcet – another important factor is armed and geopolitical conflicts affecting the general and the real estate market and the rise in interest rates, currently at 4.5%. According to Duelo, tightening monetary policy "has affected the residential sector, where only those not affected by current interest rates can continue to invest in the same way as before. Business premises and buildings – more focused on the professional investor – are perhaps not being impacted as much".
For his part, Francesc Quintana, CEO of Vivendex, believes that it will also depend on the political situation. "The population and businessmen feel a sense of fear, which will not help to increase investment in the real estate sector, especially in the residential sector," says Quintana.
The executive also referred to the enforcement of the Spanish Housing Law. Although many measures, such as the possibility of limiting rent, remain in the hands of the autonomous communities, "in those in which it is applied, it will be done in a particularly restrictive manner, excessively limiting homeowners' rights".
Foreign investment is another key factor pointed out by experts. Laborde Marcet states that the number of transactions from abroad has grown over the last year, becoming a driving force in the market.
Vivendex's CEO, for his part, recalls that foreign investments are "always focused on high-priced assets", which is why they are centred on the luxury sector while more affordable properties "are being bought by the more local public. In general, Spain's appeal as a good place to live and a good place to telecommute is causing this mobility and this increase in foreign investment".
Iñaki Usain comments that foreigners are attracted to invest in cities such as Madrid or Barcelona because they are safe leading cities with a good climate, good education and health and legal security, with attractive prices for foreigners guaranteeing them a good return. "However, I don't think that most investments come from foreigners. Historically, it has been around 15% of the total investment, and now it is around 18%, but I don't think it will go beyond 20%".
As for small investors, Unsain explains that their weight has diminished somewhat due to two fundamental factors, such as "the increase in the cost of financing that we have mentioned, and the uncertainty generated by the government's interventionism in the laws. Investors normally buy to rent out, and the government is pushing through laws that regulate rental prices, which is discouraging investment.
Overall, experts believe 2024 will be good for investment as long as the conditions are right and there is at least more certainty about the future moderation of interest rates.