Remax published its market forecast for this year, marked by economic and geopolitical uncertainty.
The real estate network, which currently has 35,000 associates in 40 European countries, says that "markets are changing in response to global events", but that one of the trends set to continue in the coming months is the heterogeneous behaviour between sub-markets.
In this sense, the company states that "understanding and explaining the European housing market situation is not an easy task. Much less so is it to understand trends and future market behaviour. The first difficulty is that there is a myriad of housing markets that behave differently, or even contradict each other. It is not only countries that can be different. There can be different behaviours in different cities and even in different neighbourhoods within the same city.
Another message from Remax is that interest rates, which experienced the fastest rise in history between 2022 and 2023, are now at more normal levels than in previous years when they were at 0%.
"Europe has grown used to unusually low interest rates in recent years and so the rise in rates actually represents a much more "normal" scenario. While rates are expected to fall further in the near future, "buyers and sellers should not anticipate rates returning to the historically low levels they've been at since 2009," the property network argues.
Even so, the company says that "there are opportunities in the Spanish property market whether as a buyer, seller or investor".
For buyers, Remax reports that "new opportunities will arise", partly because "people who delayed selling will enter the market, creating favourable conditions for price negotiations". Moreover, they believe that developers "looking to reduce their inventory can offer new properties at lower prices".
As the report emphasises, the key for homebuyers is to maintain financial stability and liquidity, which are "crucial to improving bargaining power and flexibility, allowing them to capitalise on market conditions effectively".
For investors, the real estate company stresses that residential real estate "continues to provide protection against inflation, because investments and asset values also tend to appreciate over time. For landlords, rental income also tends to increase due to inflation, which means that whether the property is for living or investment, residential real estate should retain its relatively low-risk investment status".
For sellers, the key is the growing demand for home purchases, driven by both Spanish and foreigners, and underpinned by the strong employment performance. "The labour market is at record highs regarding the number of people in work and all-time lows in terms of unemployment levels, generally across Europe. There has also been a lot of immigration into Europe and within Europe itself with a population trend towards the big cities. So, despite rising rates, demand remains very high," Remax argues.
Furthermore, demand will continue to grow, at a time when financing conditions are likely to improve, with interest rates lower than those seen in recent times.
Another prediction made by the real estate network is that foreigners will continue to play a prominent role in home buying in Spain. "Our great strength and our differential advantage as a country is in being the best destination in the world for residential tourism and for immigration of all levels. Thousands of people from other European countries (and further afield) are buying and will buy homes in Spain in the coming years. The pandemic increased and accelerated this process because people are prioritising well-being and working remotely. Plus Spain is the preferred place for Europeans to move to after retirement," the report explains.
In terms of renting, Remax does not foresee any short-term changes in the market, so it expects more demand and a falling supply, which means that the situation is becoming "more critical, especially for young people, for whom it is becoming harder to access rental housing" in the big cities.