In Spain, the most sought-after provincial capitals for the homebuyer are those that have the highest household income and in addition also have the lowest unemployment rate. This is the headline that we can draw from the report that has been made public by the real estate portal Idealista regarding the residential market in Spain in 2020. This report analyzes the preferences of the real estate investor in 2020, being very interesting especially under the complicated circumstances we have lived through, and unfortunately continue to suffer, because of the pandemic. One of the conclusions that may be drawn from this report is that, currently, the rental market is more in demand than buying and selling. Some weeks ago in this blog, we wrote an article about housing rental offers on the rise in Spain. This article reveals the important business niche in the real estate market. According to this report, the average value of the rental market is 5,7 points, whereas the buying and selling market is only one point and a half. It does not escape notice that, according to this report, during the fourth term of 2020 rental housing was only 1,6%, whereas the buying and selling market was 5%. However, these facts and figures changed due to an important increase in the demand for rental housing, and this has caused a reduction of the buying and selling offer.

WHEN IT COMES TO BUYING A HOUSE

The most sought-after provincial capitals to purchase housing are Madrid (with a relative demand of nearly 6 points), Pamplona (5,3 points), Las Palmas (3,4 points), Zaragoza (3,4 points) and Seville (3,2 points). Next comes Santa Cruz de Tenerife (3 points), and in eighth position comes Barcelona (with 2,9 points) and also San Sebastian (2,9 points). As we have already said, the most demanded provincial capitals in which to purchase property are the ones with the least unemployment rate together with the highest average income. However, the two cities in the Canary Islands as well as Seville are exceptions to the rule as their unemployment rate is quite high. In all the provincial capitals we have mentioned, the housing offer available is the lowest in our country, and this makes getting property there much more difficult than in other cities. In the last term of 2020, the relative demand increased more than 31% with regard to the same period in 2019 when the offer scarcely rose 3%, causing prices to rebound around 2%. According to the facts and figures shown by Idealista, foreign investors are the main homebuyers in the cities of the Canary Islands, as well as in Barcelona and Valencia. If we look at investment effort to purchase housing then we can point at San Sebastian, Palma de Mallorca, Madrid, Barcelona and Girona.

WHEN IT COMES TO RENTING A HOUSE

With regard to renting, the increase in supply in cities like Madrid, Barcelona or Palma de Mallorca has led to a price adjustment. However, if we pay attention to the total of the national territory then the relative demand has dropped 31%, whereas the offer has increased 45,3% and the price has risen 3,6%  in the fourth term of 2020, in relation to the fourth term of 2019. As for the most requested provincial capitals regarding housing rental, Pamplona is top of the list (point estimate 22,2 in relative demand), next comes Vitoria (18,8 points), Guadalajara (14,4 points), Zaragoza (9 points) and Santa Cruz de Tenerife (8,8 points). All of these cities have an unemployment rate which is below the national average as well as having variations in population which are above the average.