Vicenç Hernández is the president of the Association of Real Estate Agents of Catalonia (AIC) and CEO of Tecnotramit. Hernández took the reins of the association at the end of last year with the aim of helping to further professionalise the figure of the estate agent. The executive, who has taken on this new role in the real estate sector in the midst of the pandemic, talks to idealista/news about the impact of problems such as squatting and rent control, which he explains “tarnish the reputation of Spanish real estate and slow down international investment”.
The real estate agency business is starting the year with new challenges. How has the first quarter of the year been?
It has been quite good in terms of activity and there is no discouragement, because there is a lot of movement and a lot of interest from clients, both in terms of supply and demand. The truth is that in this sense there is not a negative impact on the mood.
It is true that we are seeing that buyers are asking for a lot of information, but they are not making up their minds because they believe that prices have not fallen as much as they should have, and sellers, unless they are in a very critical situation, prefer to wait rather than sell badly. Here the ‘wait and see’ issue is affecting both parties, but we can say that there is interest.
The situation has not really improved in numbers since the end of 2020 in terms of the number of people infected by the pandemic, how will the year evolve?
There are some variables that for me are decisive. First of all, since this is a health crisis, you have to take into account the evolution of the vaccine, both in terms of the level of vaccination rhythm and that there are no side effects. If these two variables are good, it will have a positive impact on financial markets and economic activity. We have to understand that people are already a bit tired of this situation.
Another issue that worries me and that I think will be a decisive factor is the evolution of the ERTES. We are told that the people who are in ERTE are not unemployed, but they are unemployed, and the companies where they have an employment contract are having a hard time, so we will see if they turn into ERES. This will have a negative impact on the unemployment rate and directly on the estimates of the numbers of the evolution of the sale and purchase of flats.
We must also take into account the legal framework and foreign investment, i.e. all the regulations that are being put on the table, such as the issue of limiting the rental price, which does a disservice to potential investors, or squatting. These two factors tarnish the country’s reputation for investment.
So do you think that vaccination will be a boost for sales this year?
Yes, because it is a psychological factor. At the end of the last quarter, which was very good in terms of mortgages, which is clearly related to the evolution of the sale and purchase of flats, when the vaccine was announced, the effect of optimism was brutal. We are very sensitive to any news that confirms what we want to hear.
If the pace of vaccination accelerates, and above all if it is shown that there are no side effects, it will be a critical variable.
The residential business in Spain is going through a turbulent time. What are you asking the administration to do this year?
What we are asking is that before taking any decision, they talk to the people who know, to technicians. Wouldn’t it be absurd to take a health-related decision without listening to the College of Doctors, for example? This is the only thing we are asking for. We, at the AIC, have a non-partisan position, nor are we an association that is going to defend the landlord against the tenant, nor the other way round.
What we defend is the real estate business and we know the history of this sector better than anyone else, and in the end, in order to make a decision, you have to know the context and all the consequences. It is no secret that the rent cap has not worked in any country. And even less so without other measures that go hand in hand with this law, such as expanding the public supply of flats for rent or tax measures that can benefit both tenants and landlords.
Health professionals are talking about a fourth wave. Do you think that the real estate agency business could withstand another stage of restrictions or confinement?
If it were to happen it would be tough. The experience we are having tells us that the measures should not be so restrictive, because the Spanish economy would have a hard time recovering from a new wave of temporary business closures.
On the downside, the pandemic has been good for the estate agency sector to get its act together. To realise that all the talk of digital transformation was necessary, and had to be done now, it could not wait. All those agencies that don’t see that their business has a digital alternative.