Since its entry into force on May 26, 2023, the new Law for the Right to Housing has generated a wide debate in the real estate sector of our country. Today, led by David Gordo, Head of Large Real Estate Accounts at Housfy, we review the main impact that is expected in this sector and how they could affect purchase and sale transactions.
Before diving into details, it is worth knowing what the main objective is behind the new real estate housing law that landed in Spain in May.
In a very brief way, the Law for the Right to Housing seeks to establish a regulatory, equitable and safe framework for tenants and owners. Likewise, and to achieve its main objective, it promotes access to decent housing and chooses to regulate rental prices in stressed market areas.
The first signs of the new law seemed to rumble through the housing market long before its final approval. But, although much of the regulation focuses its repercussions on the rental market, it is also crucial to analyze the effects that it can generate in the field of sales in the near future.
Although the new housing law of 2023 was approved just a few weeks ago, the debate has been going on for more than two years, when the idea began to take shape. But, what has really changed so far in the sales market, once part of the regulations are already in place?
Undoubtedly, one of the most significant potential effects of the new law on the housing market would be the decrease in the supply of rentals, as opposed to the growing demand. And it is that, since its negotiations and subsequent processing in Congress, there are many people who have chosen to wait and evaluate how the situation evolves before making decisions about renting their homes.
Even so, according to the expert and ambassador of the comprehensive real estate services platform Housfy, David Gordo, the new law could have a significant impact on the real estate buying and selling market during the year 2023. The main reason: many owners will prefer to wait and assess how the situation is evolving before making decisions about whether to sell or rent their homes.
While some wait, others have already taken the step. With the uncertainty generated by the new regulations and the restrictions imposed, there are already some landlords who are considering the option to sell. As a result, the real estate landscape is undergoing a subtle but significant change in the balance made up of both rentals and homes for sale.
This is a decision that stems from contemplating how some of the measures of the housing law mainly protect the tenant. This is how Gordo explains it: “rental owners fear feeling helpless by the measures proposed by the new legislation, thus thinking of changing sides and selling their properties to save themselves future inconveniences”.
The decrease in the rental supply in contrast to the increase in its demand and the change in preferences are only two of the possible effects that this new housing law poses to the market. However, with multiple measures susceptible to change, the future looks somewhat uncertain.
Looking to the rest of 2023, the real estate market is expected to experience a slowdown. And it is that, although some landlords choose to join the club to sell their home, Gordo predicts that "the number of registered sales this year will be less than in 2022."
Despite the effects that uncertainty and the decrease in rental supply may generate, it should be noted that the real estate market is dynamic and has the ability to adapt to new circumstances. Although the law presents many challenges for owners, it also opens up opportunities to find innovative solutions that update the real estate market.
