Sunday, December 5

The housing sector alerts to imbalances between supply and demand


Blocks of flats in a stock image.
EP

The real estate sector recognizes living a sweet moment of growth but alert that they are already perceived imbalances between supply and demand that can lead to price hikes in the future. 2021 may end as the year with the highest number of home sales in the last decade. Pisos.com it expects that this year it will end with more than 550,000 purchases (compared to 419,000 last year) and with 89,000 new construction visas. The improvement in the economic situation in general, the savings bagged in the last months of the pandemic by families and the low interest rates have configured a “healthy” moment for the sale of homes in Spain, as described by the director of studies from Pisos.com, Ferran Font, although it warns of growing imbalances between supply and demand, exacerbated by the new housing law. “There is an imbalance between current demand and a supply that is not growing at the same rate“, says Font.

The current situation is that there is a lack of purchase alternatives in many areas of Spain and there is little new construction at a time of rising material costs and a certain shortage of specialized labor. In this context, in which housing is gaining weight as a safe haven for investors, it is entering a circle, virtuous or pernicious depending on the point of view, of foreseeable price increases and growth of the ‘gap’ or separation between quality of new construction and a rental housing stock perhaps unattractive for investment in improvements. According to Pisos.com, prices will increase by around 2% this year and 4% next, although these forecasts may change depending on the impact of the new housing law or the evolution of the price of construction materials.

“There is a certain risk of price rises, but not like in 2017“, says Font, who defends that the” moderate evolution “is the most predictable at the moment, both for sale and for rent. In the latter case, there have been price drops in large cities in recent months due to the lack of demand of foreigners, a situation that will be amended in the future. In any case, uncertainties arising from the new housing law remain, which on the one hand will imply limitations or caps on the price of rental income, and on the other the establishment of quotas for Officially protected housing Font recognizes that in the case of the city of Barcelona, ​​where 30% of the supply is already required to be allocated to VPO, the palpable effect is that new developments are being carried out in neighboring towns. However, real estate considers that the full effect of the regulatory change in the sector will not be perceived until 2024.

Regarding the rent, Font thinks that the great fork of flats is being “demonized” “What it does is delay the professionalization of the home rental market in Spain and slow down the improvement in the quality of the offer.”


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