The keys to the real estate sector in 2023 LV Real Estate

The keys to the real estate sector in 2023

LV Real Estate & Architecure sees solid growth in home buying and selling activity The real estate market will continue to show solid signs of growth in terms of home buying and selling and home mortgage granting. LV notes that the market is stronger and more solid. Narrowing the gap between headline and core inflation In the current macroeconomic context, marked by uncertainty, the gap between headline and core inflation is narrowing, among other issues, due to the containment of the price of electricity, gas and fuels through regulation.

Great strength in the Spanish job market. Real estate, like other sectors, is governed by the evolution of the labor market. In its Active Population Survey (EPA), the INE reflects the strength of the labor market in Spain, which is aligned with the country's production data. The number of hours worked has not changed since 2019, remaining at pre-pandemic levels.

There are no signs of overheating in the real estate and mortgage markets. At present, there are no signs of overheating in the real estate and mortgage market. More than half of the new housing mortgage loans respond to a fixed rate. On the other hand, the mortgage effort rate when purchasing a home stood at 34% in the third quarter of 2022, compared to the 55% it reached in 2008. The home buyer is a solvent profile, although it varies according to the asset Whoever seeks to buy a home is usually a solvent profile, mainly oriented towards housing replacement or investment in the residential market. Currently, the euro/dollar parity has encouraged the purchase and sale of housing by foreigners. The value of the house grows constantly at the price level constant growth in terms of price.

Measures such as the ceiling of 2% of the rent would increase the asking-price of new rentals are an added plus. The Spanish residential market is less volatile than other European markets On average, in 2022 the price of new and second-hand housing increased by 3%, according to the Appraisal Society, compared to 7% growth in the European Union (Eurostat) and 11% in the United States (Zillow). In the same way, while rentals in Spain have registered an annual increase of 7% in 2022 (Idealista), in the United States the growth has been 8% (Zillow) and in the European Union 11% (Eurostat). Mortgage portfolio more solvent than in other neighboring countries The mortgage portfolio in Spain is more solvent than that of other neighboring countries. Less than 15% of mortgages have a loan to value (loan / value ratio) equal to or greater than 80%. In addition, Spanish households are less indebted than those of other world economies. BTR: an increasingly attractive market for investor appetite. The demand calls for investment. The Built to Rent (BTR) market will gain prominence in terms of investment, especially in large capitals with great economic activity, such as Madrid, Barcelona or Malaga, where LV Real Estate & Architecture is located.

Sustainability, in the spotlight The sustainability criterion is now an essential requirement for any new project in the real estate sector. This will continue to be a trend in 2023, not only in new construction, but also in what has already been built, since the regeneration of the Spanish real estate park is necessary. At LV we are committed to sustainable homes. In 15 years, single-person households will become 30% of the total. In the next 25 years, it is estimated that the Spanish population will have grown by 12%, thanks to immigration and an increasingly aging population. In 15 years, the number of single-person households will account for 30% of the total residential park in Spain. The sociodemographic reality will determine the configuration of the residential market of the future.

LV Real Estate & Architecture