The increase in variable mortgages, the moderation in sales and purchases or a lower supply of rental housing are some of the forecasts that will determine the evolution of the sector. In addition, investment, replacement and foreign homes are positioned as the major players in 2023 and sustainability is becoming an increasingly important factor when choosing a home.
Despite the economic uncertainty, the consequences of the war in Ukraine, the inflationary peaks or the rise in interest rates, it can be said that 2022 was a dynamic year for the Spanish real estate sector. This is reflected in the high number of sale and purchase transactions carried out last year, approximately 13% more than in the previous year.
But what will happen in 2023 in the real estate market? Experts agree that, although the scenario will continue to be positive, we will see a moderation in the main parameters of the sector.
With the arrival of the new year, the experts at Solvia, a leading firm in real estate services for individuals, companies and investors, have identified the trends that will mark the real estate market in 2023.
- Increase in the contracting of variable mortgages: After a 2022 that began with record demand for fixed-rate mortgages for housing, the latest data published by the INE indicate that this trend is reversing. Thus, the contracting of this typology in October represented 66.8% of the market, the lowest figure since September 2021 (65.8%). This change in direction will continue in the coming months and is mainly due to the strategy of banks to establish minimum prices for variable mortgages and tighten the conditions for fixed mortgages.
- Decrease in rental supply and no replacement: The increase in demand is coupled with a decreasing supply. A trend that will continue in the coming months, also taking into account that the Government has announced that the 2% limit on the increase in rents will be maintained throughout 2023. This is a measure that could cause certain landlords to be reluctant to give up their available homes for rent. This lack of supply, which according to many experts could experience falls of between 15 and 20%, together with the increase in interest in renting, will continue to put pressure on prices in the coming months.
- Challenges for the new construction sector: The regulatory complexity of the different autonomous communities in the generation of land for development, the lack of skilled labor, the increases in raw material prices or the risk of an economic recession due to interest rate increases are some of the factors that are delaying the creation of new construction projects. However, the solid demand for this type of asset and its attractiveness for investors could boost this sector, reaching the levels of previous years in 2023.
- Moderation of investment in the tertiary sector: After a 2022 in which historic figures were reached, investment in non-residential real estate, such as commercial land or logistics warehouses, is expected to continue to grow in 2023. However, it will tend to stabilize due to the current economic uncertainty.
- Investment, replacement and foreign housing, protagonists in 2023: Thanks to its high profitability and the great opportunity it represents for investors seeking stability, housing will remain a safe haven in 2023 in the face of inflationary rates. These properties, together with replacement and foreign homes, will support the market in the coming months.
- Sustainability, a key factor for the sector: The real estate market continues to work to adapt to the new needs of consumers and their requirements when choosing housing. Sustainability, energy efficiency or the use of environmentally friendly materials and construction systems are factors that are increasingly influencing the selection of a property.
- Moderation in buying and selling: Recently, the European Central Bank announced a new increase in interest rates, currently at 2.5%, the highest level since 2008. Furthermore, it has stated that there will be further increases in the coming months, which will continue to reduce the purchasing power and savings capacity of families, two determining factors for buying a home. Thus, and as reflected in the III Solvia Market View 2022, it is expected that the number of purchase and sale transactions carried out in 2023 will experience an adjustment of between 10% and 15%.
- Stabilization in the sale and purchase price: Although the increase is not expected to be as sharp as that experienced in 2022, forecasts indicate that housing prices will be positive in 2023, with an increase of between 1.5% and 2.5% year-on-year, mainly due to the reduced leverage of the sector and the shortage of housing in large cities.
- Commitment to innovation: In 2023, real estate companies will continue to explore the possibilities offered by the metaverse, a world parallel to reality that, among other advantages, makes it possible to carry out physical asset transactions thanks to the digital replication of properties, in addition to being able to visit them virtually or reserve them through the “tokenization” of contracts. This process allows homes to be digitized so that their metaverse version represents the real-life value of the property. The use of Big Data by real estate companies is also expected to increase, as this large storage model makes it possible to carry out studies with a high rate of reliability, streamline administrative processes, assess market opportunities and establish better conditions with clients.
