Traditionally, homes have been a safe haven for many investors. In fact, investment in housing in Spain in recent years has grown remarkably, and in 2019 alone, more than 35,000 million were invested in real estate. According to CIS data, in June of that same year, 81.8% of Spaniards were interested in acquiring a property they owned.
This trend continued to rise until March 2020. However, the arrival of the coronavirus and the state of alarm slowed down the investment percentage, which fell to 13% compared to the same period of the previous year.
2021 may be a good year for the housing sector
Experts agree that, despite the crisis, throughout 2021 the demand for housing will begin to grow, and prices, now up to 10% lower, will gradually adjust again.
That is why many people wonder if now is a good time to invest in housing before prices return to similar figures to those of 2019.
And it is that, the current situation has changed the preferences of the buyers and, after the days of confinement, many consider the option of buying a new house that adjusts to their new needs (with more windows to the street, with open spaces such as terraces or balconies, with more versatile rooms or extra rooms that can be used as a workspace, etc.).
In fact, at Sky Marketing as a real estate portal, we have experienced a 30% growth in the search for single-family homes, in homes of more than 80 m2 and with outdoor areas, with a garden or terrace.
This increase has also been notable in new developments, as buyers appear to be more receptive to larger new-build properties designed with outdoor spaces.
Although it is a good time, experts continue to recommend caution if we want to invest in housing, since there is a lot of volatility in the markets.
5 reasons why it is a good time to invest in housing
If you have been looking to buy a house in Madrid, Barcelona, Valencia or any other city in Spain for a long time, now you can find good opportunities. In addition, the supply of real estate can be greatly expanded and, when a slight improvement in the market begins to be seen, it will be considered a good time to invest in housing.
Some reasons that can help you make the decision are:
- Greater business opportunities
Times of uncertainty and instability usually generate more movement in the real estate market. Some people decide to sell their properties to obtain liquidity, and this means that we can detect better opportunities to buy a flat or a house. As they say colloquially, “A rough sea, fishermen gain.”
Our advice? Trust professional advisers to help you find offers tailored to your budget and needs.
- Sector on the rise
During the second quarter of 2020, the real estate market practically came to a standstill. However, in summer we already began to notice a rebound in the sector, with a total of 33,201 home purchase transactions registered in August, which represented a year-on-year increase of around 6%.
Some are betting that these high numbers are due to operations that were put on standby due to the coronavirus crisis, but it is also true that the demand for real estate is increasing for two reasons: first, many people want to move; and, secondly, small and medium investors are already predicting good opportunities.
- Safe investment
Housing is a refuge value since it is practically impossible for it to lose all its value from one day to the next. In fact, while home prices can fall, they never do so as abruptly as stocks.
In addition, investing in housing can be profitable in several ways. We can buy a house or an apartment as a habitual residence, but also to use it for rent (the average return you can get is 3.9%) or use it as a second home. We can even buy to resell and make a profit: since 2015, the average price of apartments has risen 12%.
- More profitable mortgages
Due to the crisis, interest rates are currently at historic lows, so we are at a good time to apply for a mortgage. It is true that banks request more guarantees from their clients, but it is also true that they must sell their products, so if you have savings or a fixed income, it is a good time to buy a home and get a mortgage with more favorable conditions.
- More new construction
Although after the crisis of 2008 the second-hand real estate market lived its golden moment, the arrival of the coronavirus has made us rethink our way of living.
This makes people consider new priorities when buying a home according to new social habits. For example, telecommuting convinces many people to buy in smaller cities or residential neighborhoods, away from the city center, and in new developments with larger flats and green areas.
Caution, your best ally
Home profitability is usually positive and now we are in a good time to invest.
However, before making the decision, you should study all the options, especially if you want to buy an apartment or a house to resell or rent.
In all cases, it is convenient that values:
- Risk of bubbles. In Spain, investing in brick is always considered as an option at times like the one we are experiencing, so the housing market can collapse. This favors the generation of bubbles like the one we experienced in 2008 and whose explosion caused one of the worst crises in the sector in recent decades.
- Variable market. Home values vary greatly by region, city, or area, and also by timing. For example, the profitability of a house or an apartment located in a coastal area or in the mountains is seasonal, since it is limited to specific periods of the year. Therefore, it is convenient to differentiate between the “conventional” real estate market and the “vacation” market.
- Slower return on investment. The rental market is very volatile, especially in times of crisis. Profitability varies greatly, and sometimes the payback on investment does not occur for 15 to 20 years.
Our advice as professionals in the sector? Buy to rent only if you have savings and if you can cover the expenses of your investment in a solvent way.
Are you thinking of moving house? Do you want to invest your savings in Tajarat properties? Now is a good time to invest in housing. Call us and we will advise you.