Real estate market trends in Spain in 2020: appraisals and perspectives

If the real estate market in France has generally been little impacted by the coronavirus crisis, and even more by the confinement decided by the government, Spain for its part has recorded a significant drop in prices in major cities. 

In fact, the barometers of Spanish notaries record a 10% decrease in the value of property in Madrid, Barcelona and Valencia, the three largest urban complexes in the country. 

For foreign individuals, and first and foremost, French nationals, is this the ideal time to invest, or on the contrary, is it better to wait before committing?

The real estate market in Spain: the state of play after confinement

Spain, like almost all European countries, experienced a period of almost total shutdown in the spring; at the end of summer, the time has come to take stock.

The Comprarcasa real estate network, which has 150 agencies in Spain and Portugal, reports a 9% drop in the price of second-hand homes, with the possibility of a further 3-5% loss by September. (Source Idealista). The fall in the prices of the old in the spring reached 12% in Barcelona, in the districts of Eixample and Les Corts.

The national peculiarity of the real estate market in Spain is that it is composed of 18.6% of investments coming from abroad in 2019. The prolonged confinement therefore has a greater impact than in other countries such as Germany, that whether in the short or medium term. However, after a record general decrease of 4.6% in June, a recovery of + 1.6% was observed in July. Large cities remain spared from this trend, the rise in property prices being caused above all by rural areas.

Currently, in August 2020, the situation seems to be stable at the national level, all types of goods combined: the price per square meter is generally between 2411 and 2755 euros (average of 2583), with a decrease of only 0, 1% over three months, according to the Arkadia agency (Source Arkadia)

Summer 2020 trends for Spanish real estate

In Spain's two largest cities, Madrid and Barcelona, the price per square meter is around 4,000 euros, which remains significantly lower than the European metropolises of Paris, London or Berlin, all of which are three standing at more than 8000 euros / m² in summer 2020. Real estate prices even fell by 1.9% in Barcelona in July, with a downward trend since the end of summer 2019 (-3% over one year).

As in France, the need for space is felt, materialized by a 40% increase in requests for houses with terraces or gardens, at the start of summer. Likewise, searches by individuals for apartments with 4 rooms or more increased by 37%.

After confinement, we observe a change in investor behavior in Spain, characterized by a sharp increase in rentals, in a country where the rate of owners is historically one of the highest in Europe, as noted by the site acheterenespagne.fr (Source acheter en Espagne). This increase in demand for rental accommodation is + 21% in Barcelona. The Spaniards and Europeans involved in a real estate project in the Iberian Peninsula thus seem to be playing the card of safety first.

What prospects for the end of 2020 and 2021?

According to Spanish experts, a 30% drop in real estate investment is expected in 2020, which remains slightly higher than estimates made in France, where FNAIM expects a decrease of around 25%. Rents should fall by 10% by the end of the summer, despite a context of rising demand for this type of property.

There is little to worry about in the long term: Spain is not currently in the context of a real crisis in the real estate sector, as was the case in 2008/2009, at the time of the case of the Subprimes. It should be remembered that the causes of the fall in prices in 2020 are primarily due to general containment, and that there is therefore no speculative bubble, fueled by a mix of unstable stocks, linked to other sectors. economy. Currently, the selling price in Spain is still 15% lower than the level before the subprime crisis.

Still according to the website acheterenespagne.fr, the Spanish experts expect a return to normal in 2021 (Source acheter en Espagne): the end of 2020 will be thus presents as a favorable period for investment, for individuals wishing to take advantage of the fall in prices.

For those interested in buying or renting on the Costa Brava, know that the Generalitat of Catalonia will impose a control of the price of rents on the territory, which should help stabilize the evolution of market prices. at least at the local level. If you still want to invest in real estate in Catalonia, you are more than ever advised to use a local agency. An experienced team up to date with the latest market developments will provide you with the best support for your project