Malaga is extolling its leading role in Spain's real estate market. The city will add 1,500 new Build To Rent (BtR) homes over the next three years, according to CBRE's Living Trends Report.
According to the consultancy firm, Seville will add 1,000 new homes of this type in this period. In total, CBRE forecasts the delivery of 37,000 BTR homes in Spain in the coming years, 85% of these between Madrid and Barcelona.
Through the Terra Project, CBRE has identified in Malaga an area of vacant residential building land of approximately 12.1 million square metres. This space could be used for the development of around 102,000 homes, which could be absorbed over a period of 15 to 30 years. On the other hand, in Seville, an area of eight million square metres of vacant residential buildability has been identified, where it would be possible to build around 58,000 dwellings.
On a national level, it is estimated that there is an average of 255 million square metres of vacant residential buildable area across Spain, which would allow for the construction of approximately 1.8 million homes. This number of dwellings would be absorbed over a period of more than 30 years.
"In Madrid, Barcelona, Bilbao, Malaga, Valencia and Seville, given the lack of supply of finalist land, investment is focused on land under development. However, investor interest is increasingly concentrated in these provincial capitals, where they are looking for a type of product with high liquidity and low risk in its marketing phase thanks to the high demand for housing," explains Miriam Goicoechea, Director of Research at CBRE Iberia.
Rising residential land prices
According to CBRE, the increase in demand has generated increases in land prices in the main regions during 2022. In particular, in Malaga and the Costa del Sol, the price of land experienced a growth of 7%, making it the region with the highest year-on-year increase in land prices. For this year, the consultancy firm forecasts a stabilisation of land prices in the main cities and provincial capitals. However, due to the shortage of finalist land, an upward trend in prices is expected.
The disparity between supply and demand for housing has resulted in an increase in rental costs. Malaga ranks as the fifth most expensive city in Spain to rent a property. On average, the price per square metre per month is 11.9 euros, showing a growth of 19% compared to the first quarter of 2022. Nationally, the price of rent has experienced a year-on-year increase of 8% in the first quarter, reaching 11.3 euros per square metre per month.
Barcelona remains the most expensive city in Spain to rent a property, with a price of 18.6 euros per square metre per month, which represents an increase of 20% compared to the first quarter of the previous year. In second place is Madrid, with a rent of 16.2 euros per square metre per month and an increase of 10%. Palma has taken over from Bilbao and is positioned as the third city with the highest rents, closing the first quarter with a price of 13.7 euros per square metre per month and an increase of 19%.
"The main problem to be tackled is the lack of rental housing supply, a trend that we believe will increase in the coming years. Currently, 24% of Spanish households are renting, a figure that drops to 22% in Andalusia. However, this figure is still below the percentage of the European Union population living in rented accommodation (30%) and is far from the levels of Germany, Austria and Denmark, which are above 40%", comments Laura Peláez, senior consultant for Research Living, Alternative and Hotels at CBRE Spain.