As the Spanish economy improves, many individuals who left Spain due to the European debt crisis are returning, concentrating in first-tier cities such as Madrid. In the past two years, Madrid has added 150,000 jobs, resulting in an increase in the local population as well as a growing number of overseas individuals immigrating to Spain. Multiple factors have led to a continuous increase in demand for real estate in Spain. Coupled with the growing popularity of immigration through property purchase in Spain, the supply of second-hand housing in first-tier cities like Madrid is critically low, and the rental market is also experiencing significant increases!
The supply of second-hand housing in Madrid has decreased by nearly half.
According to the latest news from Spanish real estate transaction platforms, the supply of second-hand housing in the Madrid region has decreased by 43% over the past three years, with multiple areas facing critical shortages. Currently, only 20,500 second-hand properties are available on the market. The most significant issue is in the Arganzuela area, where the supply of second-hand housing has decreased by 60% compared to three years ago. The Chamberi and Retiro areas have also seen reductions of 53.2% and 53%, respectively. The areas with relatively slower decreases in housing supply are Vicalvaro (-21.5%), Villa de Vallecas (-27.5%), and Villaverde (-28.2%). On the other hand, the Madrid city government continues to restrict the sale of new developments, with the number of new properties in southern Madrid reduced from 105,000 to 38,000.
Regarding the reasons for the decrease in housing supply, Spanish real estate transaction platforms indicate that driven by immigration policies for property purchase in Spain, not only high-net-worth individuals from overseas but also Spaniards are increasingly inclined to withdraw their savings from banks to invest in real estate for higher rental yields. Over the past 20 years, the Madrid government has reduced the number of new developments in the southern region from 105,000 to 38,000. Due to the lack of new developments, people can only look to the second-hand housing market. However, the population in Madrid is expected to continue growing over the next decade, which will require more housing for residence. Therefore, the tight supply of housing in first-tier cities like Madrid and the tightening trend of Spain's immigration policies are evident.