Budget segment of real estate market in Spain: forecasts for 2021

According to the results of the first quarter of this year there has been no decline in property prices in Spain. Moreover, they even grew in certain regions. This trend is also relevant for the budget segment, which is especially popular among foreign investors. It is expected that until 2022 prices will show a stable increase.

How is the demand for mortgage loans changing?

If back in 2019 many people wanted to get a loan and buy housing in a newly constructed building or in the secondary market in Spain, today the percentage of such applicants has decreased. This is largely due to the unstable situation which does not allow potential buyers to be confident in that they will be able to repay their loan on time.

Today we can note the following indicators:

• in 2020 mortgage loans were issued by 7.6% less than a year earlier;
• in January 2021 the loan amount was 30% less than in the same period in 2020.

Now the situation is beginning to gradually stabilize, returning to previous indicators, but the pace of recovery is very slow. Today, Spaniards and foreign investors prefer to buy housing without having to take out a loan. In addition, the situation is influenced by the fact that during the pandemic people were able to reduce their expenses and save more.