Spain on the rise

In a country that prides itself on its history, culture, and siestas, Spain’s real estate markets wouldn’t have been termed well-defined, cutting-edge, or transparent only a decade ago. However, fast forward to 2023, as the European Union ages and Spain’s Golden Visa program approaches its 10th year, investment has increased—pushing the country into a pivotal phase for real estate. As a result, the country has gained traction as a property management leader in Europe.

The Spanish market

Spain is a country of homeowners. According to Eurostat, between 77%–80% of the population own their own homes, making individual owners the main clients for property management. And although housing prices in Spain are rising, the average cost remains lower than elsewhere in Western Europe. While the past decade has seen an increase in home rentals—24% in 2021 compared to 16% in 2013, according to the Instituto Nacional de Estadistica (INE), the Spanish Statistical Office—the majority of residents still prefer to manage their properties themselves.

María Padín, Clikalia

“Spain’s housing market benefits from a good climate and great quality of life,” says María Padín, head of sales at Clikalia, a growing Proptech company in Madrid. “Prices have risen steadily in recent years, and there is a growing demand, particularly in major cities such as Madrid, Barcelona, Malaga, and Seville. It is still affordable compared to, for example, France.”

Foreigners coming into Spain are more likely to invest in local real estate than rent, particularly because of Spain’s Golden Visa program. Started in 2013, this program stipulates that by investing 500,000 euros in a property in Spain and proving residence for 10 years, foreigners can become permanent residents (and possible citizens), an attractive prospect for many.

According to official figures released by the Bank of Spain, Spain’s residential property market has improved since the COVID-19 pandemic, with a 5% rise in prices between 2020 and 2022. The INE says the market looks favorable, with values estimated to continue increasing this year. Spain’s inflation has also fallen 2% since 2021, and this solid economic performance carries over into the property market. Spain is the first among its neighbors to maintain post-pandemic stability, and an uptick in foreign investment has occurred.

Sam Azasu

“These factors have led to a powerful economy,” says Sam Azasu, professor and program director at the University of Navarra in Madrid. “The Spanish real estate market is one of the most important in Europe. Increased investment has fed a key success indicator: the growing size of the commercial real estate market, which Statista estimates to have been $617 billion in 2021 and $593 billion in 2022. New investment capital of 5.2 billion euros was raised in 2021, behind only France, the United Kingdom, and Germany.”

Proptech

Buying, selling, and remotely managing Spanish real estate naturally has been a big business in recent years and, as expected, comes with a host of challenges. An increasing number of foreign owners comes with increasingly complex property management needs.

First, while housing prices are appealing, options are limited, leading to fierce competition among buyers. In addition to identifying the right property, finding agents, and securing the necessary permissions and financing remotely can be difficult. There’s also frequently a holding period during which the property needs to be managed, renovated to meet market demands, and staged for future owners. The emergence of businesses like Clikalia is meeting the demand for remote real estate services.

Based in Madrid, Clikalia strives to modernize management and the residential and condominium property market online. Since its inception, Clikalia has become Spain’s leading real estate service for buying and flipping houses. They’ve expanded their property management services, managing a large number of assets, many times on behalf of foreign and remote owners. Clikalia leverages technology, including interactive renderings, to improve its customer experience and enhance management operations.

Broadening connections

Going into the new year, 2023 IREM President Renee Savage, CPM^®, CCIM, announced her vision for IREM to broaden its international connections, foster ethical property management, and help a new generation grow as leaders around the world.

Dawn Carpenter, CPM®

As part of that initiative, IREM’s 2023 Secretary/Treasurer Dawn Carpenter, CPM^®, traveled to Spain in June to attend the first-ever National Association of REALTORS^® (NAR) Western European Summit, hosted in Granada, Spain. As the winner of 2022’s NAR award for international engagement, IREM used the trip to network with NAR affiliates, global partners, and new connections.

“Real estate associations play an important role in representing, protecting, and defending the profession by offering resources and training opportunities while also serving as a channel for professionals to build their qualified professional industry networks,” says Alejandro Escudero, director of global strategy at NAR, who worked the event in Granada on behalf of the organization. “In the last couple of years, Spain has seen a much more active and effective collaboration among associations based in different territories, aiming to better serve the consumer. This makes Spain the right place to hold the conference this year.”

Alejandro Escudero

Carpenter agrees: “As Spain’s housing and rental market reaches its capacity, demand has exceeded supply. In a case like this, the need for increased property management is obvious, and IREM is there to support those working to fill the gap.” Property management needs in Spain have become more complex with an influx of foreign investment and evolving housing needs. Companies like Clikalia are innovating in real time to create solutions and improve the customer experience. That innovation, combined with the resources and best practices that IREM provides, can position the country’s property management industry to thrive. 

Spain fast facts

Total population (2023): 47,222,613

Urban population (2023): 81.6% of total population

Largest urban areas by population (2023):
>Madrid (capital): 6.75 million
>Barcelona: 5.69 million
>Valencia: 838,000

Real gross domestic product (GDP) growth rate: 5.52% (2021)

Strong property sectors:
>Student housing
>Flex living
>Senior housing

Trends impacting real estate market:
>Demand for quality
>Environmental, social, and governance (ESG) performance and net zero targets
>Flexibility in space use
>Aging population

Sources: CIA World Factbook; Mordor Intelligence; CBRE, “Real estate market outlook 2023 Spain”