A recovery in the property market is expected this summer with the purchase of secondary residences as well as with the return of foreign investors. Real estate analysts are optimistic but they also advise us to go step-by-step and never take anything for granted. Such uncertainty is due to the health crisis we have gone through this last year and a half. Therefore, we can talk about a moderate optimism with regard to a possible real estate recovery this summer. Some weeks ago, we wrote an article in this blog about the beginning of the recovery from the COVID of the real estate sector. In that article, we talked about the good data shown, last March, by the Instituto Nacional de Estadística and how the data of January 2020 is expected to be reached if transactions continue to take place. The confinement led to the need to have more space and more light at home and this has resulted in a reactivation of the real estate market. It is obvious that the evolution of the pandemic will be the key factor regarding the definitive development of the market. Our country is immersed in the process of vaccination although we are daily keeping our eye out for new viral and bacterial strains as well as being on the lookout for the changing virus behaviour. However, right now experts on the real estate market believe that this summer we can expect good data.

TWO TRANSCENDENTAL FACTORS

All analysts agree on one thing: there will be two factors which will determine housing development this summer. On the one hand, economic and employment recovery will be very important so that investors can regain the necessary confidence. On the other hand, it is also a major issue that foreign buyers return and have their rightful importance. For the time being, we can observe a slight recovery regarding second residences, a fact which gives grounds for optimism. When foreign buyers left a gap, due to the pandemic, the domestic buyer in part filled the gaping hole left by them, and in many cases this was due to the need for more spacious and bright homes, as we have previously mentioned. We cannot say that domestic buyers have totally replaced foreign ones. However, they have occupied part of the gap that was left. At present, foreign buyers are slowly starting to return, especially with regard to some real estate sectors as, for instance, the luxury one. It is estimated that in 2020, the purchase of property by foreign buyers dropped around 26% (in all, it is calculated that 46.300 houses were bought by foreigners in Spain).  This meant a bit more than 11% of all the transactions that took place in 2020. If the vaccination process continues to advance, then foreign investors are expected to take up the space that corresponds to them and boost the real estate market in our country.

OBSESSED BY SPAIN

Real estate experts maintain that the pandemic has not reduced the interest of foreign buyers to consider Spain as one of their favourite destinations to invest in property. Nonetheless, these foreign buyers do not only invest in holiday residences but they also look for first residence properties, especially those located in Madrid and Barcelona. In the capital city we can highlight the Latin American buyers whereas in Barcelona we find more European investors. In any case, it is an obvious fact that the health crisis has reduced the activity of foreign investors and a total recovery of the sector is not expected during 2021. If the data of the health crisis continues to improve, it will not be until 2022 that the levels before the crisis can be reached. If this happens, then foregn investors of property in Spain would recover their rightful place.

Picture 01: jcomp