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As 2021 draws to a close and with it, one of the best recent years for the Spanish real estate market, we take a look at next year. We get the crystal ball out and ask what the trends for sales and prices will be in 2022. What direction will luxury property in Spain take over the next 12 months?
But before we jump into 2022, lets take a quick look at what has happened so far this year in the Spanish real estate market. 2021 has been all about recovery and the big return. As travel restrictions have lifted and vaccine programmes advanced, international buyers have returned to Spanish property in their droves.
Spanish buyers have also returned and as a result, this year has posted strong results across the board. Sales have soared and, in some areas, have returned to pre-pandemic levels. This is the case on the Costa del Sol, for example.
Prices too have returned to an upward trend with new-build properties the star performers in the sector. A recent study by Idealista revealed that the Costa del Sol has seen some of the highest price hikes in the country. Three districts in Marbella and one in Estepona ranked in the top ten in Spain.
Against a generally positive background for the Spanish real estate market, there’s also widespread optimism for the economy. This year, Spain has seen solid GDP growth and just received billions of euros in European funds, which constitute a major injection in the country’s balance sheets.
In addition, household savings have returned to their pre-crisis levels. Moreover, Bankinter’s latest analysis for the real estate sector in Spain forecasts that household savings will continue to rise in 2022. Greater liquidity among buyers, therefore, seems likely.
Property prices in 2022
So what does a buoyant economy and real estate market mean for house prices next year? The 2021 trend was up and there’s every sign that 2022 will see a similar scenario. Bankinter is currently forecasting a 2% rise in prices generally next year. We believe the uptick will be higher, particularly in the most sought-after parts of Spain such as the western Costa del Sol, for example.
There is certainly plenty of room for growth since Spanish real estate values remain well below their peak reached in 2007. According to the latest Tinsa market report, they stood at -29% in October this year.
In addition, with interest rates still at historic lows, few investment products offer the same returns as property.
Sales of Spanish real estate in 2022
With savings back at pre-crisis levels and the Euribor mortgage interest rate still hovering below zero, everything points to solid demand for property next year. Bankinter predicts around 500,000 transactions, similar figures to those last seen in 2007. Of those, 400,000 would be sales of resale property and the remaining 100,000 of new builds.
Land sales will continue to experience strong growth. Purchases in this sector have risen by around 45% so far this year, a pace that has pushed prices of plots in Spain up by 11%. Bankinter expects more moderate price increases for land in 2022 but a continuation of demand.
New-build properties in 2022
New lifestyle trends instigated by the pandemic have driven demand for new-build properties. These offer larger homes and higher quality finishes, both highly sought-after characteristics among homebuyers.
2022 should see a continuation of this demand since supply within the new-build sector still lags behind demand. Bankinter believes that the market could easily accommodate 100,000 new starts next year after 90,000 this year. The figures contrast remarkably with those for 2013 when development started on just 34,000 new properties in Spain.
Luxury homes in 2022
And so to our final prediction for the Spanish real estate market in 2022. The high-end sector of the market has proved highly resilient during the pandemic due to increasing demand among discerning buyers, particularly foreigners.
We believe this trend will continue next year. Supply in this niche section of the market remains below demand and as a result, prices have risen steadily over the last 18 months. With few new properties entering listings, we see no signs that the luxury homes sector will slacken in 2022.
Why wait until 2022?
Everything within the wider economic context points to a strong year for Spanish real estate in 2022. And with prices and demand set to continue their upward trend, it makes financial sense to buy now rather than wait until next year.
If you’d like to take a look at what’s on the market in the western Costa del Sol, get in touch with our expert team. They’ll be more than happy to advise you on the best location and property to suit you.