Real Estate with the wind at its back

“We emerged stronger.” announced a Ministry of Health campaign after the end of the strict confinement imposed by the first wave of the coronavirus in our country. In fact, the real estate sector has lived up to this maxim. After a complicated 2020, 2021 became not only the year of recovery for all industries but also a record year for the real estate sector since the economic crisis of 2008.

Reasons for optimism

Far from moderating, widespread optimism has increased during the first quarter of 2022. However, do the figures reflect this optimism? Fellow Funders has collected relevant data that indicate that the Spanish Real Estate industry is indeed in ascendancy.

According to data provided by Cushman & Wakefield, the Spanish real estate sector closed the 2022 first quarter with a €3,600 million investment, an increase of 28 % above the average for the first quarters of the last five years. The hotel (30 %) and residential (28 %) subsectors stand out within this investment volume.

As previously mentioned, 2021 emerged as the economic savior for the real estate sector. For this reason, we also encounter encouraging data for the Real Estate sector this year. According to the real estate consulting firm CBRE, the value of real estate assets grew in Spain last year. As for investment, the leading sub-sector was the residential sector, which capitalized 28% of real estate investment in our country. The 2,959 million investment in the living sector represented an increase of 13% over 2020.

The residential sector leads the way

From this preliminary data, two conclusions can be drawn:

1. Quarter by quarter, the Real Estate sector improves its figures.

2. The residential sub-sector is leading this upward trend.

The Official Association of Registrars provides figures that show that during 2021, 564,569 home sales and purchases were registered in Spain, a record figure in the last fourteen years. However, these figures are still far from the 2008 figures (before the crisis), especially with levels of financial leverage that are also much lower. Based on the latest available data for February 2022, we encounter the figures also very encouraging. According to the General Council of Notaries, 55,524 home sales and purchases were registered during this month: a year-on-year growth of 19.2%. As for prices, there was a year-on-year increase of 7.9%, placing the price per square meter at an average of €1,541.

According to the data, it is undeniable that the real estate market is immersed in an upward trend. We should add to this situation the value of real estate as a refuge asset to protect against the devaluation of money that causes inflation. During this March, the CPI in Spain has risen by 9.8%, which leads us to believe that the Central Banks will take measures to increase interest rates. As a result, the Real Estate sector represents the ideal investment opportunity within this context.

Fellow Funders Real Estate keeps on growing.

The Fellow Funders Real Estate project, which celebrates its first anniversary on the 8th of April, has been almost parallel to this upward trend in the sector. As we reported last week in our blog, we have ridden the real estate and residential “wave” during these first twelve months, raising five million euros for projects of these characteristics. Of these, two were destined for developments in the exclusive coastal urbanization of Sotogrande, whereas the other three were for four house flipping projects in Madrid.

As the Spanish saying goes, “The stronger the wind blows, the higher the kite blows.”. Fellow Funders is aware of the potential investment opportunity that the real estate market represents, especially those projects that are approaching us. For this reason, we are particularly active regarding real estate on our equity crowdfunding platform these weeks. Last week we launched a house flipping project in Plaza de Lima. This week, however, we are launching a property near the Wanda Metropolitano stadium. As the famous coach of Atlético de Madrid would say, “Match by match.”. We aim to become the reference platform for alternative investment in real estate, just like that, match by match. Do you want to invest in real estate? Don’t miss the latest projects on our platform!

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