In a conference held in Zaragoza on October 27, 2023, the Association of Directors and Executives of Aragon (ADEA) had the honor of hosting Jorge Pérez de Leza, CEO of Metrovacesa, who tackled the current challenges in the residential real estate market in Spain. During his address, Pérez de Leza emphasized the lack of available land for residential use as the primary concern impacting the housing supply in the country.
The event commenced with an introduction by ADEA’s president, Fernando Rodrigo, who commended Pérez de Leza’s participation and highlighted his industry expertise. The CEO of Metrovacesa then began by analyzing the current state of the residential market in Spain, describing it as a sector that is performing better than expected, despite competition from other international markets. Nevertheless, he also mentioned the possibility of price stabilization or even a decrease in the coming year.
One of the pivotal issues that Pérez de Leza addressed was the shortage of housing supply in Spain, which currently stands at around 80,000 units per year. According to Metrovacesa’s CEO, this is partially due to demographic factors, with approximately 120,000 households being created annually in the country due to factors such as immigration, emancipation, separations, and population relocations. This latent demand is not being met by the existing supply.
Regarding the impact of interest rates on the market, Pérez de Leza acknowledged that mortgages have become more expensive in the second half of the year, and banks are becoming more selective in loan approvals. However, he does not anticipate a significant setback in the housing development business, as 90% of their units are already sold, and he does not expect significant cancellations.
Pérez de Leza also mentioned the uncertainty in the commercial office land market due to rising interest rates, which could affect sales in that sector.
In terms of property transactions, it is expected to remain at similar levels to those in 2022. However, Pérez de Leza suggested that in the coming years, there could be fewer people with the ability to purchase due to the scarcity of residential land. In his opinion, the problem is not with housing prices but rather with the rising land values.
To address this land shortage, there has been an increased demand for alternative housing solutions, such as “coliving,” which focuses on shared spaces with private rooms, primarily targeted at young professionals with short-term mobility needs.
Lastly, Pérez de Leza emphasized the significance of sustainability in the real estate development sector, although he noted that complying with decarbonization regulations and measuring the carbon footprint would entail substantial costs.
In summary, Jorge Pérez de Leza’s presentation at the ADEA Forum in Zaragoza shed light on the state of the residential real estate market in Spain, with a focus on the shortage of land for residential use and the importance of addressing this issue to meet the growing demand for housing in the country. Additionally, the need for alternative housing solutions and sustainability in the development sector was highlighted.