The strong increase in prices is having an impact on the real estate market, boosting the purchase of second-hand homes.
The rising cost of raw materials and other products in the construction sector as a consequence of the global supply shortage and logistical problems, is significantly increasing the price of the House new.
Along with this, economic uncertainty is leading to an inflation that we see in practically all sectors, especially in real estate. A trend that is being reflected in a growing interest from investors, both large and private, in housing as a “safe haven”.
According to the data handled by the ‘proptech’ Casavo According to the National Institute of Statistics, this situation has led to the demand for second-hand housing accounting for 79.5% of those transmitted by sale only last September. A figure much higher than usual and well above new construction housing, which accounted for 20.5%.
These percentages have been largely contributed by the strong rising cost of new housing, although the second-hand has also done it during the last year. According to Eurostat data, the price of houses increased by 6.8% in the second quarter of the year, both new and second-hand.
This price increase, together with the conjunctural characteristics as a consequence of the impact of the pandemic, which is causing great uncertainty in the markets, is leading to a high inflation rate at 2006 levels.
However, the forecasts made by the National Construction Confederation (CNC), this inflation will be less pronounced in the second-hand market than in the new-build market, which makes it the best option to invest in “safe haven value” .
Second-hand housing, a rising value
Given the remarkable growth that home purchases have experienced in recent months, 40.6% only during the month of September, and second-hand homes in particular, Casavo foresees that this trend will continue to rise in the face of the next months.
Although, as Francisco Sierra, General Director of Casavo in Spain, points out, the increase in the purchase of second-hand homes suggests a positive evolution of this real estate segment, “We must bear in mind that the uncertainty due to the shortage of supplies and the future Housing Law will cause a slight increase in the supply of second-hand housing in the face of the possible retraction of the new construction”.
Although the option to buy a second-hand home has become the preferred option for investors, especially individuals since in addition to being a “safe haven” they can enjoy it, it must be taken into account that it also has its “cons ”. In many cases, these homes need a reform whose cost can be difficult to assume since it does not enter the requested mortgage to cover the cost of the home.
In this sense, it must also be taken into account that with these reforms the problem of lack of building materials to carry it out, as well as an increase in costs.
However, from Casavo they point out that this situation may also represent an opportunity to offer second-hand, renovated and guaranteed homes. For this, they have developed a technological platform that performs home appraisals and instant offers that allow direct purchase of real estate in less than 7 days.
Through it, the company will study the possibilities of a home to adapt it to current needs and put it up for sale in the shortest time possible and at competitive prices.
Initial Image | Majorca land
