Home sales will fall in 2023 and the price will stabilize, according to CBRE

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The residential sector showed greater dynamism than expected during 2022, especially during the first half of the year. However, the increase in financing costs has caused a slowdown in the market and a reduction in the rate of housing growth, according to the latest data from the consulting firm CBRE. “During 2023, the residential market will enter a deceleration phase, characterized by a significant reduction in sales and a stabilization of prices. However, we hope that this will be limited in time, especially with regard to the new housing market , which will continue to show signs of good dynamism,” commented Miriam Goicoechea, head of research at CBRE Iberia.  

The residential investment segment represented 74% of the total invested in Living with 904 million euros, of which 805 million corresponded to BTR (build to rent) and 99 million to Phone Lead PRS (Private Rented Sector). It highlights the interest in the affordable product and the volume of investment by the public sector; 41% of the total invested in the rental residential sector was allocated to affordable and social housing . For its part, the public sector was one of the most active investor types with more than 109 million transacted from January to March.

“The growing demand of households that opt ​​for the rental formula, whether for flexibility, mobility or an alternative to buying a home in a context of rising financing costs, will continue to drive the residential rental segment and the institutionalization of the housing stock in Spain. We hope that the percentage of rental homes will continue to grow over the coming years , until it represents 26.4% of total homes in 2026,”  Goicoechea said.

For its part, student residences remained the second asset class in the sector in the first quarter of the year, with a volume of 160 million euros (13% of the total investment) with three transactions in the provinces of Barcelona and Valencia. Spain, with a bed provision rate of 6.7%, is at the bottom of Europe. According to the report, 19,000 new beds will be added to the current supply of student residences until 2025.



The investment in Flex Living, which includes new temporary housing solutions, professionally managed and with services included, reached 154 million euros (13% of the total in Living ), with Corporate Living concentrating 81% of the total volume and Coliving the remaining 19% . Nine of the ten transactions registered in the first quarter were between Madrid and Barcelona. The potential of this segment is supported by a growing demand that seeks a housing solution that has not existed until now. According to CBRE, the market for flexible space operators is very fragmented although consolidation has already begun. Senior Living did not register transactional activity in the first quarter, its greatest limitation being the lack of specialized operators.

By products, the luxury residential segment, ultra luxury and branded and serviced apartment products are gaining weight in the Spanish market. It includes three types of assets: Luxury (homes with a prime location and a differentiating project), Serviced Apartments (luxury homes with a wide catalog of services) and Branded Residences (luxury homes associated with a brand). "In the European and international context, Spain is becoming increasingly attractive, competitive and unique compared to its counterpart cities such as Paris, London or Milan. The wide cultural and leisure offer, together with the excellent gastronomic experience , are determining factors for the promotion "At the national level, projects are being seen in Madrid, Barcelona, ​​the Balearic Islands and the Costa del Sol," says Javier Kindelan, vice president and head of living at CBRE Spain.