Engel & Völkers, the German real estate company specializing in the brokerage of high-end real estate, has grown by 8% in Spain in the difficult socioeconomic context that has marked the year 2022. Despite the challenges posed by past political and economic events year, the company has reached an intermediation volume of 3,402 million euros, the company explains in a statement.
“The war in Ukraine and its impact on the price of raw materials, the energy crisis, the increase in inflation and interest rates, have caused a certain slowdown in some operations,” says Juan-Galo Macià, president of Engel & Völkers in Spain, Portugal and Andorra. But despite the uncertainty, “the real estate sector has maintained its status as a safe haven among investors,” Macià points out. In total, Engel & Völkers has managed 8,495 operations in Spain, of which 4,404 have been sales and 4,091 rentals.
The 30% growth registered in the rental segment stands out, where it has achieved an intermediation volume of 122.6 million euros, mainly driven by the increase in the price of operations to an average cost of 2,497 euros. The average price of sales transactions has also risen, although to a lesser extent (+6.3%), to stand at 744,687 euros.
“In the year 2022, a turning point has been marked between the first and second semesters within an atypical year where the real estate sector has not been able to remain oblivious to global uncertainty,” explains Macià. “After some difficult years conditioned by the pandemic, in 2022 we have been able to surpass ourselves again”, confirms the president of Engel & Völkers for Spain, Portugal and Andorra.
In a market in constant transformation, Macià explains, “we have continued to grow in number of operations, transactional volume and expansion of the brand with the opening of the Metropolitan Market Center in Seville as the main bulwark”. Although the average price has risen for both purchase and rental, price adjustments are expected for 2023 in medium locations, with stability in premium locations where the strong demand observed in 2022 will continue.
Engel & Völkers explains that in the higher segment, the increase in interest rates has less impact on market activity, since a large number of customers do not need to apply for a mortgage to finance their acquisitions. However, in some cases there is a greater sensitivity to prices, which translates into longer periods of commercialization.
In medium locations, demand has decreased in recent months due to increasing barriers to applying for financing. Banks are much more cautious when it comes to valuing real estate and demand stricter requirements on the solvency of clients.
Added to this is the rise in interest rates, which makes it increasingly difficult for a growing number of people to finance investment in a home. As a consequence, prices have dropped slightly in some markets. “We see this slight drop as an adjustment after the exceptionally high price increases of the last few years. From 2020 to the beginning of 2022 there was a real boom in the real estate market and we knew that this could not last forever. The price trend is is stabilizing, but we do not expect sharp falls in the future”, adds Juan-Galo Macià.
Engel & Völkers maintains its expansion plans in 2023 under the group’s successful business model. Based on the pillars of the franchise business together with the Market Center concept and the company’s own operations, Engel & Völkers expects to continue growing and attracting new consultants. “We are always open to enthusiastic people joining our teams, with the aim of further reinforcing our market leadership and being able to write the next chapter in the company’s success story,” concludes Juan-Galo Macià.