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Date Published: 20/04/2022
ARCHIVED - Spain prepares for a new real estate boom
The British are top of the list for foreign house purchases in Spain
The pandemic changed the face of Spanish real estate, with many homeowners re-evaluating their property priorities during lockdown and opting for a move. As a result, in 2021 the housing sector registered the highest number of sales in 14 years, creating an unexpected real estate boom which has put pressure on the market.
New builds barely represented two out of every 10 purchases last year, according to deputy director general of UCI, who pointed out that “buyers are clinging to second-hand due to the shortage of new housing, which in recent years has not exceeded 100,000 units.”
Despite this high demand, prices have remained relatively stable since the onset of the coronavirus pandemic, reaching an average of 1,823 euros/m2 in 2021, which represents an increase of just 3.9%.
By region, homes on the Balearic Islands are now the priciest in Spain (2,963 euros/m2), followed by Madrid (2,926 euros/m2), the Basque Country (2,860 euros/m2) and Catalonia (2,293 euros/m2). In contrast, the communities with the lowest prices are Extremadura (731 euros/m2), Castilla-La Mancha (815 euros/m2) and the Region of Murcia (1,049 euros/m2).
The good news is that the experts don’t foresee this situation developing into another real estate bubble, since financial institutions have continued to lend at a sensible rate; the percentage of mortgaged homes remains at 45%, “a very stable figure in recent years, which highlights the significant number of operations carried out with family savings or by investors.”
Foreign interest in home purchases in Spain is on the rebound also, with non-nationals accounting for 12.6% of all buyers in the last quarter of 2021.
The British are in the lead once again, overtaking the Germans as the top home buyers in Spain, primarily choosing to buy homes in the Balearic and Canary Islands and the Valencian Community.
Image: Wikimedia Commons
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