The creation of companies in the real estate sector grew by 15.3% in the first two months of the year, according to data from the Gesvalt appraiser. A boom driven by the resilience of the sector and the arrival of European aid from Next Generation EU funds, according to José Antonio Salomón, the firm's director of Market Research. The increase has remained high in recent months and in February, the last month for which data is available, the greatest increase occurred in the creation of construction companies (22.7%), while the creation of real estate activity companies grew by 10.3%.
In absolute terms, the communities in which the most companies dedicated to the real estate sector have been incorporated in the first two months of 2023 are Madrid (899 incorporations), Catalonia (893), Andalusia (811) and the Valencian Community (591). Madrid, with a growth of 18% in the creation of new companies, and Catalonia with a growth of 22%, also stand out for their better evolution than the Spanish average, although the growth rates are higher in smaller communities where a small increase in the number of companies the percentages shoot up. Thus, the greatest growth has occurred in La Rioja (60%), Asturias (54%) and Navarra (33%).
"Not only is the creation of companies increasing, but dissolutions have fallen by 3%, with which the net balance is even higher," said Salomón, who recalled that the creation of companies in this sector has already behaved better in 2022. than in the economy as a whole.
Salomón pointed out that the creation of companies reflects that the sector is still strong. “There continues to be a demand for home purchases, because many operations are being closed without financing, thanks to the savings accumulated during the pandemic, and because many purchase decisions have been accelerated to anticipate the rise in rates,” he recalled.
In his opinion, there is also a lot of activity in the commerce and office sector, in the center of cities. "And above all, there is a commitment to energy rehabilitation of homes and offices, thanks to European funds and the Y administrations. many companies are being set up to manage these lines”, he pointed out.
According to Salomon, "although there is concern in the sector about economic uncertainty, and it is clear that 2023 will not be a record year, the creation of companies reflects how professionals warn that there are good prospects for the coming months."
Thus, the data from the appraiser reflects that in the first quarter house prices have grown across Spain for the first time since the pandemic: 6.7% compared to 2022, which is the largest increase since the covid, after seven consecutive quarters of increases above 3%. With this new increase, the average price of housing in Spain has stood at 1,536 euros/m2, still 28.3% below the all-time high recorded in the first quarter of 2008.
Gesvalt's data, however, indicate that the increase in prices and the rise in interest rates, in an environment in which wages have barely grown, has increased the theoretical effort necessary for the purchase of housing by the families: the installments to pay already represent 36.1% of the gross disposable income of families in the last quarter of 2022, already exceeding the threshold of 35% that banks consider an excessive level of indebtedness.
In Salomón's opinion, activity has been maintained in recent quarters, despite worsening accessibility, but it is foreseeable that transactions will drop slightly in the coming months due to the tightening of financial conditions. "We do not see joy in financial institutions in the granting of mortgages, and in fact in the last two months fewer mortgages have been given and purchases financed only with own funds have increased."
In his opinion, this situation will lead in the coming months to the demand for purchase going to worse properties, or to secondary areas, where families can still buy with a level of indebtedness acceptable to banks, and also to an increase in the demand for rental housing.
The real estate activity, in his opinion, might not suffer too much from the rise in rates. “Everything will depend on how long rates remain high. In my opinion, at least for a year they will be, but then they could start to go down and the market will recover.
