According to a study by the estate agency “aProperties”, now is the right time to invest in the “build to rent” sector in Spain, that is, building homes to let. Multi-million investments are already flowing into the sector thanks to its strong prospects.
People in Spain are increasingly interested in renting, as owning a home is no longer a priority for many of them today. The growing popularity of this business model is directly linked to the purchasing power of young people, for whom renting a flat is more affordable than buying one, given high prices and rising mortgage interest rates. In addition, new builds are becoming more attractive because they meet all the modern requirements, which have changed over the last two years.
The “build to rent” sector is growing fastest in the country’s three largest cities: Madrid, Barcelona and Valencia. As a rule, these are apartment blocks or whole residential developments located away from the centre but in areas with good transport links. Most of the flats have 1-3 bedrooms, and their size ranges from 60 to 80 m².
In Europe, Germany leads investment in this asset class, followed by the Netherlands and Switzerland. In Spain, three quarters of the population still live in their own home, although the trend is already changing, especially among the youngest, who want to become independent from their parents sooner.
Overall, the current macroeconomic situation favours renting and, accordingly, investment in “build to rent” projects. If the situation does not change significantly, rents could rise by 5% in 2022 compared with the previous year.
