Feb 16, 2021 Newsletter

Safe-haven investment in Spanish housing will be a booming trend in 2021

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The coronavirus crisis and the uncertainty it has generated has impacted the economic sector and the stock market, sending the interest rates of different financial products significantly downwards.

This situation has benefited the Spanish real estate sector, where households and investors see housing as an attractive asset in which to invest with long-term profitability, thus consolidating investment in real estate as a safe haven. In fact, real estate accounts for between 80 and 98% of household wealth in Spain.

“Investing in times of crisis is an idea far removed from the reality of many families, but if this investment is made in a property that will be the family home, the place to build a life project and which will be profitable in the future, the economic effort is worth it,” says Anna Puigdevall, treasurer of Real Estate Federation Fiabci Spain and general director of the Association of Real Estate Agents of Catalonia (AIC).

And the fact is that more and more families are opting to buy a home with their children in mind, as well as the long-term profitability offered by these real estate assets.

Housing is therefore presented as a safe, recoverable and revaluable investment, and a well-known asset in which to invest in times of uncertainty.

This trend is unlikely to change in the future, as the health crisis has put the spotlight on the importance of housing.

“In the midst of the crisis we experienced a fall in demand due to the uncertainty, but the gradual return to the new normality has increased the number of sales and purchases, whether by households that see housing as a form of stability or by families looking for new living spaces that meet their expectations,” says Anna Puigdevall.

Young people and millennials: the new buyer profile

The health crisis has also attracted new buyer profiles that until now had opted for the rental segment. These are young people and millennials, who are also those who have been worst affected by the crisis and who have the most problems in terms of access to housing.

“Bearing in mind that interest rates are at rock bottom, young people are beginning to see how they can get a return on their money compared to renting so that the monthly payments are not sunk but to obtain a property”, says Puigdevall. Spain is a country of homeowners, with a rate of 1.38 homes owned per household.

As far as investors are concerned, renting out rooms together with the need for liquidity of homeowners generate good opportunities that make this profile also see housing as a safe value to invest in, acquiring second-hand properties for refurbishment and future rental.

“This profile is defined as buyers with liquidity who know how to detect market opportunities and who see the purchase of property as an operation with which to revalue a property and obtain profitability from it in the future”, says Puigdevall.

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