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Spain 'passes' from renting homes and the pandemic unleashes the madness of buying and selling

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While the sale has not done more than rise like foam, the rental market is going through difficult times in our country. The fall in rent applicants, from 49% in February to 44% in August, according to a report prepared by Fotocasa: "Half a year of pandemic: impact on the real estate sector", is a good example of how the pandemic has changed the paradigm of the Spanish real estate market. The dossier details the consequences that the sector is suffering, highlighting the 4-point drop in the share of housing compared to the month prior to the pandemic, standing at 27% in August. The effects of the coronavirus have begun to be seen in the housing sector, and the upward trend is expected not to return for at least two years.

The Covid crisis has not shaken all housing markets equally. In fact, home purchase, unlike rent, rose 4 points, standing with 43% of demand. The real estate portal conducted a study on individuals who had carried out actions related to the sale, where 70% had bought or tried to buy, while 23% had sold or tried to sell. And the fact is that the sale and purchase market is a sector that is still standing, despite the crisis that is being experienced today.

This stability has caused that hardly any differences are perceived with respect to the data prior to the pandemic, so finally both markets, both the rental and the sale, they have ended up matching (Before the pandemic, the rent was over 49% and the sale was 39%). This fact confirms the hard blow that the rental market has suffered in these six months.

THE VALENCIAN COMMUNITY, THE MOST AFFECTED

According to the Report published by Fotocasa, the Valencian Community is the region of Spain where the drop in participation in the housing market has been most noticed due to the pandemic. Tourism, one of the economic engines of the community, has become the mirror of the decline in shares by individuals, who it has gone from 35% in February to 25% in August. The participation of individuals stands at 14%, 5 points less than in February, and is mainly explained by the fall in ineffective search (that is, those who have not managed to buy a home).

On the other hand, Madrid ranks as the community with the highest participation, 33%, and hardly having undergone changes compared to February. After Madrid, the regions of Andalusia (29%) and Catalonia (26%) follow. Despite being on the podium of real estate activity, both have lowered the percentage of individuals who carried out actions related to housing (4 and 3 points, respectively).

INCREASE THE INTEREST FOR THE PURCHASE IN THE MEDIUM AND LONG TERM

Of the total number of active housing applicants in our country (12%), a 3% are made up of individuals who have purchased a home in the last 12 months, and 9% who have actively looked for a home but have not yet found it. Alluding to the current context, the Report speaks of a drop by one point compared to February, so it is not as marked a drop as expected. Furthermore, as this group is a priority for real estate companies, it is important to highlight the 88% of the population that has not yet bought or been interested in buying.

However, it cannot be said that 9 out of ten Spaniards do not want to buy a home in the future. In fact, the 21% of this group plans to acquire a home in an interval of 2 to 5 years (8% within two years and 13% within two to five years). And it is that, despite the pandemic that is being lived, young people are being one of the groups that has increased their idea of ​​buying a home the most: going from 5% in February to 9% in August in people between 18 and 24 and from 7% to 13% in the case of young people between 25 and 34 years old. The last age segment studied, from 35 to 44 years old, has also seen an increase in interest in acquiring a property, from 6% in February to 10% in August.

According to Anaïs López, Communication Director of Fotocasa, this segment of the population "that right now is not actively looking for a house, but that in the medium and long term they do intend to buy a house it is very interesting for the sector".

As in the younger population, in the autonomous communities of Madrid and Catalonia also interest in home ownership has increased with a medium and long-term perspective. In the capital, for example, it has gone from 18% to 23%, and in the case of Catalonia it has increased from 15% to 22%.

According to what was published in the Report, they seem to be encouraging data for a sector damaged by the coronavirus crisis, and it is expected that the price of housing, which had reached highs in both Madrid and Barcelona in recent years, will be corrected by the effects of Covid.

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