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The real estate sector in East Spain explodes in 2021

The real estate sector sets out to to return to normality in the provinces of Alicante and Murcia and is pending the evolution of the pandemic (especially the rate of vaccination and the evolution of restrictions) but with the confidence of having experienced exponential growth in the first quarter of 2021, still with international demand 'stifled' by border closures.

 

The professionalization of the sector after the 2008 crisis, the stability of demand and the financing of large investors are some of the keys in a context of rising prices for new construction.

These are the great conclusions of the forum on the Real Estate Market organized this Tuesday by Alicante Plaza at the Hospes Amérigo hotel in Alicante, sponsored by Grupo Levantina, .

The demand is wanting to return to normal. In March we had very high sales that have continued in April, and linked the short-term evolution to mobility. The sector is much more consolidated than in the previous crisis and we will see the fruits in the next year, because the demand is going to maintain and even grow. Also the supply of materials has been very important except for the three months of confinement, since there are no other expenses, we have benefited from the savings available for renovations. As for the new construction, the worst is over now that there have been very important peaks, while international problems such as the Suez

Canal open up opportunities for local products.

The sector is optimistic within a sensible prudence, because the impact of the pandemic has been less in real estate than in other sectors, and in logistics it has even grown; the still photo is far away to that of 2008 . Demand has withstood 2020 well, and real estate has become a safe haven for investors. With the containment of supply and sustained demand, prices have also been maintained. Activity has been very impacted by mobility, with very good months and other very bad. however with the vaccine the trend can change radically, there are very positive prospects because demand is stagnant at an impasse.

 

Differences between new and second hand market.

There are differences between the new construction market and the used housing market, in the former the price is maintained and begins to rise. We hope that upon reaching 50% vaccination, in July, the situation will begin to improve, and a change in trends towards teleworking, large terraces and gardens are being requested by new buyers, wishing to leave the big city. In the first quarter there has been a great level of sales, but the evolution will depend on the Covid.containment, after two months of madness in March and April, which will continue in 2021. As strong points, the professionalization of the sector and the entry of new players, but on the negative side we have the lack of financing and also the plots that the big players got at bankruptcy price in the previous crisis is running out, which will affect prices.

 

The international client is delighted with Alicante and Murcia provinces and acts as a prescriber, while we architects have begun to perceive a recovery of the start of houses in March and April, with certain optimism, and the appearance of other forms investment: cohousing, coliving, family assets. We also have great hope on the new accelerated method to expedite building licenses because we cannot allow ourselves to take two years to be granted a building licence of a simple villa., We are seeing how the number of transactions grows, and in the first quarter the demand with mortgage guarantee has been much higher than expected. Also, the price of new construction is rising, and all the indicators confirm that the sector is healthy.

 

An effort is being made by the local authorities.

For their part, the representatives of the Administration highlighted the work of the municipalities to support the activity. A new attempt is being done to simplified the bureaucracy and streamlined projects so as not to block investments, with licenses for priority projects, although this is not always achieved. Although we pursue the  long-waited license, as an indicator of the strength of the sector, and in 2020 the volume of requests was similar to that of 2019 despite the crisis. There are more than 900 homes under construction in Benidorm, which is turning towards the second residence and attracting teleworkers, while we are in a moment of inflection and stressed that his council has created a general direction to promote urban planning management.

The average price per square meter in the community of Murcia was 878 euros, 1.7% more than in March 2020.

 

The figures.

The sale of homes in the Region of Murcia rose 102% in March compared to the same month of 2020, when the Covid pandemic began, with 2,143 operations, according to the report published today by the General Council of Notaries.

Of the 2,143 sale and purchase transactions, 1,421 were for an apartment (96.6% more than in March 2020) and 722 for a single-family home (116.1% more).

The average price per square meter in the community was 878 euros, 1.7% more than in March 2020. 

Regarding the granting of loans, in the month of March 1,405 were signed for an average value of 102,004 euros, which represents an increase of 83.9% in the loans subscribed, although the average amount for each of them drops by 4 ,5%.

In Spain, the sale of homes rose 83.7%, the granting of mortgage loans for the acquisition of a new home by 75.5% and the incorporation of companies by 116%. 

This percentage variation is explained by the small number of operations that were carried out in March 2020 as a result of the outbreak of the COVID-19 pandemic.

The number of sales increased by 83.7% year-on-year, reaching 59,692 units, while the average price per square meter fell to 1,384 euros / m², registering a decrease of 4.7% year-on-year.

The prices of the apartments had a decrease of 4% compared to the same month of the previous year, reaching 1,570 euros / m², while the price of single-family homes reached 1,091 euros / m², registering a decrease of 1, 1%

 

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