Published on Tuesday, May 17, 2022

Spain | Brakes on housing investment

Home sales have been rallying since the second half of 2020, yet supply is barely growing. If the factors behind the sector’s sluggish recovery are not promptly addressed, the resulting pressure will push prices even higher.

Key points

  • Key points:
  • Home sales in 2021 exceeded 678,000, making it the highest figure in recent years and exceeding 2019 sales by almost 20%. Moreover, this rapid pace has been continuing as we move through 2022.
  • However, while demand is booming the same cannot be said for supply. New building permits in 2022 were just 2% higher than the figure reported prior to the pandemic (2019).
  • While an average of 50,000 to 60,000 homes are currently being sold every month in Spain, only 8,000 to 10,000 new building permits are being approved.
  • The factors behind this lagging supply include cost increases (mainly affecting the price of materials for residential construction), a labor shortage and, last but not least, the regulatory uncertainty that the sector is currently experiencing.

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