The challenges facing the real estate sector in 2021 are not few, nor are they easy. With the economy expected to leave the recession behind, many experts and analysts are looking to the real estate sector as the lynchpin of the country’s recovery. However, without fiscal legislation on track and effective economic measures over the next 12 months, certain trends in the housing market experienced over the past year may worsen.
The real estate portal Yaencontré, participated by idealista, reviews with several real estate experts what scenario the sector will face this year in terms of prices, operations, investment and objectives to beat.
One of the variables to which special attention will have to be paid is the evolution of house prices in Spain. In 2020, the price of second-hand housing in Madrid and Barcelona, but with a rise in the market as a whole of 0.9%, according to data from idealista.
According to Rafael Gil, director of the research department of the appraisal company TINSA, «the year effectively ended with reduced figures, and in 2021 market activity will continue to be subject to the evolution of the pandemic and the accumulated damage to the Spanish economy». In addition, this real estate expert recalls that the recovery capacity of the domestic GDP, as well as that of the rest of Europe, will also have an influence.
His forecast coincides with that of the CEO of Foro Consultores, Luis Corral, who reminds us that «we will have to see what the real situation of the Spanish economy is, once all the State aid and ICO loans are eliminated». It remains to be seen how the product fabric recovers and how job creation will evolve or if in the future the ERTEs will result in new unemployed.
Better sales figures, but at a lower price
In the end, the 2020 results were not as dramatic for the sector as expected in spring, at the height of the first wave of covid-19. A point that Luis Corral subscribes to, who states that «despite the confinement and its restrictions, the residential sector, against all odds, has been reactivated». The CEO of Foro Consultores clarifies that «second-hand housing is the one that has suffered the most». Specifically, those used homes «in neighbourhoods where the pandemic has had the greatest impact, with lower quality and less space».
This idea is shared by Julián Salcedo, president of the Real Estate Economists Forum, who also explains that «second-hand housing and second homes will show significant price drops» in 2021. The economist puts this drop at around 15%.
Sociedad de Tasación also believes that the price of used housing will continue to fall this year, while the CEO of Foro Consultores expects that «with a scenario of vaccination, it is normal that the fall in prices» in the most affected areas «will slow down». Along the same lines, idealista forecasts a moderation in price falls, and does not even rule out the possibility of rises in some parts of Spain, as long as the economic and health situation improves.
Better sales figures, but at a lower price.
In the end, the 2020 results were not as dramatic for the sector as expected in the spring, at the height of the first wave of covid-19. A point that Luis Corral subscribes to, who states that «despite the confinement and its restrictions, the residential sector, against all odds, has been reactivated». The CEO of Foro Consultores clarifies that «second-hand housing is the one that has suffered the most». Specifically, those used homes «in neighbourhoods where the pandemic has had the greatest impact, with lower quality and less space».
This idea is shared by Julián Salcedo, president of the Real Estate Economists Forum, who also explains that «second-hand housing and second homes will show significant price drops» in 2021. The economist puts this drop at around 15%.
Sociedad de Tasación also believes that the price of used housing will continue to fall this year, while the CEO of Foro Consultores expects that «with a scenario of vaccination, it is normal that the fall in prices» in the most affected areas «will slow down». Along the same lines, idealista forecasts a moderation in price falls, and does not even rule out the possibility of rises in some parts of Spain, as long as the economic and health situation improves.
Good time to buy.
The good news is that, in this scenario, «a lot of opportunities are opening up for buyers,» says Raf Jacobs, CEO of Inspire Property Experts. However, continues the expert, «the difficult thing for buyers today is to know what the right price for a property is». The real estate consultant states that «the benchmarks have changed and more than ever it is critical to know how to define the real value of a home given the current situation».
A different reality is emerging with regard to new-build housing, whose prices, far from falling in 2020, have reached their highest levels in the last decade. In the opinion of Luis Corral, «in 2021 they could have an upward trend and create a bubble due to the lack of supply, especially in the cities with the highest demand». Julián Salcedo also agrees, stating that «new home prices will remain relatively stable». However, it will depend on the areas and the existing supply which, in general, «will be very limited in the big cities».
One of the reasons given by the CEO of Foro Consultores for this is the tougher requirements for developers to obtain financing. «This means,» he says, «the paralysis of projects and less supply in the face of active demand».
On the other hand, in the expert’s opinion, the trend that emerged last year in terms of the type of housing with the highest growth in demand, such as single-family homes and more spacious homes with outdoor access and communal spaces, located mainly on the outskirts of large cities and medium-sized towns, will probably prevail. According to Luis Corral, «the type of housing that families are looking for has been restructured: bigger and better».
A trend confirmed by the CEO of Inspire Property Experts. However, the change that may occur towards the outskirts «is not as easy as it seems», he concludes. The expert adds that «there are more searches on portals for these homes, but purchases will not increase» with the same intensity.
