Spain's residential property market is now seeing an increase in construction activity plus a growing appetite from international investors with built-to-rent property investments driving the rise.
Global investment in the residential market jumped 9% amounting to €99bn in the first half of 2019, according to the Global Living Report by property agent Savills Aguirre Newman.
When looking just at the Spanish market, the study estimates that investment into built-to-rent property transactions in the country are set to surpass €1.5bn in 2019 alone.
We see a growing appetite from institutional investors to buy residential buildings for rent in Spain, a segment traditionally dominated by individual investors,” Juan Carlos Calvo
The study also suggests that investment in this type of residential property is growing in the southern European country due to the limited supply of "finished" properties and to an increasing interest from institutional investors.
Professional investors are shifting their investment focus towards residential assets in a bid to get higher returns than those provided by more traditional asset classes, with a particular emphasis on student accommodations, elderly properties, and residential to rent. The latter experienced a 13% increase in the first half of the year amounting to €87bn.
The global financial crisis was a turning point for the country's real estate sector that changed home ownership from a symbol of security and stability to one of financial risk.
Structural changes in demand, coupled with new purpose-built supply entering the market, have opened the sector to more investors than ever before creating again opportunities to real estate development companies in the country.