According to the analysis carried out by BBVA Research on the demand for new housing in the coming years, it stands out that both residential sales and prices have already reached the levels prior to the coronavirus pandemic.
What has been able to change the confinement and the pandemic are the preferences of households, since the demand is now more directed towards larger homes or with open spaces such as terraces or gardens. In addition, the increase in replacement housing operations has grown due to the savings accumulated during confinement.
But how can housing demand evolve in the coming years?
According to BBVA Research, the activity of the residential segment in the construction sector will be relevant in the coming years. On the one hand, this is due to the push of the rehabilitation of houses “as it drains the financing derived from European funds”. On the other hand, it will depend on factors such as the increase in the Spanish population.
The forecasts of the National Institute of Statistics (INE) project an increase in the population until 2035, but much more moderate than in the first decade of the 21st century. The study specifies that “while the population advanced around 1% between 1997 and 2012, it is expected to increase to an annual average of 0.14% between 2022 and 2035”, and this is, above all, due to the reduction in the birth rate, the aging of the population and a lower arrival of immigrants.
Another factor to take into account is the size of the households. Since the size is expected to continue reducing at a rate similar to that which we have appreciated since 2014, which would mean 2.36 people per household in 2035, compared to the current 2.5 members. Even with the drop in this figure, it would remain above the European average (2.3 people in 2020).
This figure is explained, not only by economic differences between countries, but also by sociological contrasts. Family ties are more intense in Mediterranean countries, where young people become emancipated later than in northern Europe.
From BBVA Research they affirm that “working to improve the employment situation of young people and to increase the stock of social housing would favor the reduction of this differential”. On the other hand, the increases in single-parent households and divorces have also been part of the reduction in the average size of the household.
The third factor to take into account to know the demand for new housing is the number of dwellings per household.
Currently, Spain continues to be one of the economies with the highest ratio: 1.38 in 2020, despite decreasing since the end of the last century, and it will continue to fall by around 1.3 in the coming years. In the UK and Germany the number of dwellings per household is around 1, in Denmark and France around 1.2. Spain is only surpassed by Portugal, with 1.4 units / household. This difference is due, in large part, to the relevance of tourism; since Spain is a great showcase to offer second homes or retirement homes to foreigners.
For all this, “the increasing penalty to those who have empty homes and the proliferation of rent will continue to promote the optimization of the residential stock,” according to BBVA Research, which predicts that the residential stock would grow by around 1.8 million units by 2035 , which represents an average increase of about 120,000 homes per year.
