The Real Estate Show recovers attendance and occupancy levels and offers 15,000 homes, half in Madrid. Experts agree: the sector has recovered pre-pandemic figures in two years, even surpassed it, even with sales prices that continue to rise this year.
With the participation of 297 companies, the XXIII edition of the Madrid Real Estate Exhibition (SIMA) kicks off, recovering pre-pandemic levels of attendance and occupancy, also of the public.
This year, the fair -until Sunday in pavilion 8 of Ifema- presents some 15,000 homes, half in the Community of Madrid. “Three out of four visitors are looking for a first home and we observed a slight increase in interest in second homes and as an investment. The single-family home is the main interest of just over 20% of attendees,” says Eloy Bohúa, general director of Planner Exhibitions, SIMA organizing company. The demand for a rental house is also growing. “Almost 11% see this option as a housing alternative, about four points more than in 2021,” he says. A desire that is reflected in the offer, with 7.5% of the total.
This start of 2022 is similar to the end of last year, “a very positive situation from the point of view of the general figures, whether they are for the sale of homes, as well as mortgages granted,” says Ferran Font, spokesman and director of Studios of flats.com. And that is more expensive than being an owner: “In the case of new construction housing, its price will increase nationally by 4.4% at the end of the fourth quarter of 2022, 3.4% that of second-hand”, advances Samuel Población, national director of Residential and Land of CBRE.
Even so, the real estate market reaps good numbers. “After a time of uncertainty caused by the health and economic crisis, it has recovered the right course. The current number of sales is only comparable to those experienced during the 2007-2008 period, although it is possible that in the coming months we will see a relaxation of the volume of homes sold, motivated by the foreseeable rise in rates (which will lead to more expensive financing) and high inflation, which will reduce the financial capacity of families”, argues Francisco Iñareta, spokesman for Idealista. “Probably both the stock, in decline in recent months, and the prices will tend to stabilize in the coming years.” María Matos, Director of Studies and spokesperson for Fotocasa, considers the same: “The sector continues with very dynamic participation figures. After having reached historical participation data that coincides with this boom in sales, activity is now slightly moderating -because of the decline in the rental market- and is at levels identical to those before the impact of the coronavirus.In two years, real estate has completely recovered from the outbreak of the pandemic.In addition, this tour indicates that the market has a great ability to reset and shows high activity.
The sector is behaving “as expected: in an inflationary environment, home ownership is an investment refuge to maintain value. The BTS (build to sell) maintains its very solid fundamentals in the face of great demand and the need for housing and BTR (build to rent) has established itself as one of the segments where the investor appetite is greatest. The trend that an increasing percentage of the population is renting in Spain is unstoppable in the coming years”, predicts Borja García-Egotxeaga, CEO of Neinor.
Low bank interest rates also encourage spending. “They prefer to move the money than to have it in the bank. The small investor looks for homes that are not very large, in central and well-connected locations. The large ones, national and international, have stood out for closing important operations related to buildings, hotels, land… Many focused on the BTR, others to reform and sell by units, and others taking advantage of the opportunity of the complicated situation that the hotel sector has gone through”, emphasize Jesús Gilmar and Manuel Brown, founders of Gilmar real estate.
There is a desire to buy and brand new. “The new construction housing market is experiencing a very sweet moment driven by a very solid and solvent demand that is looking for residences with large surfaces, outdoor spaces, common areas, stays for teleworking, that are sustainable and, if possible, that are on the outskirts of big cities”, says Pablo Rodríguez-Losada, Commercial and Marketing Director of Aedas Homes. A wise investment, as shown by the data from the Appraisal Society: since 1985 the price of new-build housing has risen on average by 5.6% each year. “Its revaluation is higher than that of other types of real estate, it guarantees immediate liquidity due to the interest it arouses, its status as a refuge value against rising inflation and it is a quality sustainable product, which makes it even more attractive for investors”, adds Ernesto Ferrer-Bonsoms, Director of Real Estate at Intrum Spain and Director of Business at Solvia. And the promoters notice it: “The first quarter of 2022 has been the best in the history of Kronos Homes in all the markets where we are present, Madrid, Andalusia, Catalonia and Portugal”, reveals Rui Meneses, CEO of Kronos Homes.
The intention grows… but not the offer. With data from the National Institute of Statistics (INE), the sale of this type of residence increased in 2021 by 38% compared to the year, and, in February 2022, the last recorded, this year-on-year increase was 9%. However, there are few residential assets available: according to calculations by the Association of Building Promoters of Spain (APCE), between 120,000 and 150,000 new units per year are needed until 2030 to cover the structural demand of the market. But “we have been building for a decade below 100,000, there is little finalist land. In addition, the administrative processes are quite cumbersome. This means that the supply available at the national level is reduced and that is one of the main threats that can result in an increase in housing prices,” warns Font, spokesperson for piso.com.
The Community of Madrid remains as a real estate promoter. As Daniel Cuervo, general director of Asprima, the Association of Real Estate Developers of Madrid, assures, “in the province approximately 19,000 homes are being started per year, which represents 18% of the total in terms of volume; it is the one that produces the most housing, both free and protected, increasing this percentage to around 25% in terms of billing”. A province that, with the capital as its great driving force, has a “very heterogeneous market that continues to expand in very diverse areas, such as the new neighborhoods of Las Sedas and Espartales in Alcalá de Henares or El Cañaveral in the capital,” he adds. Rodriguez-Losada, of Aedas Homes.
And the luxury real estate market in these first months of the year? Also as expected: “It is behaving as we had expected. Since a full recovery from the pandemic in 2021, it had stable growth in demand since the beginning of 2022,” says Alejandra Vanoli, CEO of VIVA Sotheby’s International Realty. “Compared to the first quarter of last year, we have billed 18-20% more,” she argues. Regarding the buyer of a premium property, there are still confinement savers and “the majority are clients who have considered a change of life due to the pandemic and the new possibility of teleworking. They are looking for larger homes and in non-urban areas” Vanoli points out.
If the option of moving is not contemplated, it is essential to feel comfortable at home. The months locked up in confinement demonstrated the importance of creating a welcoming environment. With data from the Ikea Life at Home report, a third of Spaniards perceive their home as the guardian of their mental well-being and two out of five declared that they have already made changes to their homes to redecorate them and adapt them to their needs, achieving a more flexible and multifunctional house. “In recent years, it has been a refuge for most and now that we move with greater freedom, we want to inspire a new relationship with this space: the home as the environment in which you recharge your batteries to enjoy everyday life away from home. It’s our territory,” says Carlos Cocheteux, Director of Sales at IKEA Spain.
According to data from the sector, the spending of Spaniards on interior design and furniture increased by 3.1% in 2021 compared to 2020. Decoration that helps convert living rooms into offices and facilitates order in the house, among the best sellers of IKEA, which , with 1,682 million euros, closed last year with a growth of 16% compared to the previous year. The leading and pampered rooms at the time of investing continue to be the living room (sometimes also an office, a children’s playroom and even a gym for hours) and the bedroom.