Inflation does not give a truce. Prices, since the pandemic —and even more so with the outbreak of the war in Ukraine— have increased at record rates. Housing was not going to be left behind: according to the latest FEGEIN report, the traditional rental price in Galicia has increased by 5.8% in just one year, and according to forecasts, it is expected that for the second half of 2022 reaches 6.6%. The focus is on the two main Galician cities: Vigo and La Coruña, which have prices per square meter of €9.1 and €8.6, respectively. In fact, 90% of rental homes in the two main cities of Galicia cost more than €500.
The causes, according to Benito Iglesias, must be found in the limited supply of traditional rentals. They assure that “never” have there been so few possibilities to rent, and that prices have never reached figures as high as those that are being seen today. With the proliferation of vacation rentals, which have higher rates of return, many owners are choosing to withdraw their homes from traditional rentals to put them on the tourist market. In fact, they indicate from the Federation that “at the moment there are more than 14,500 vacation homes in the marketing circuit in Galicia compared to 3,200 homes in the traditional rental marketing circuit”, a “brutal comparison”.
In addition, from the organization that Iglesias chairs, they believe that the real estate legal situation is not in favor of reversing this problem. They consider that the Housing Law is “interventionist”, and that is why there are “owners who are considering moving to seasonal rentals because it is a segment that is not contemplated in the Housing Law.”
Throughout the Galician geography you can find luxurious and large villas for sale for more than one million euros. And, despite the times of crisis, they sell well: there are fewer houses at millionaire prices for sale in Galicia. Specifically, while last year there were 400 single-family homes of more than one million euros for sale in the real estate market, this year there are eight dozen less, 320.
Above all, as reported by the Galician Federation of Real Estate Companies (FEGEIN) in one of its latest reports, these luxury villas abound on the coast and in the main cities of Galicia. Thus, Pontevedra is the province where this type of property can be found the most: 200 houses for sale, but ten less than a year ago. In La Coruña there are 100 single-family homes in the marketing circuit for more than one million euros (130 in 2021). In Lugo, 12 are sold and, in Orense, eight. In addition, they are the main urban centers where there is more supply of these homes
But, who can afford to buy these homes at a price of more than one million euros? They assure from the Federation that the vast majority of buyers (up to eight out of ten) are national citizens who, in addition, acquire the chalets as their main home. It is logical that the statistics also indicate that they are successful businessmen or senior managers of large companies located in the Community. The buyer’s profile is between 40 and 60 years old and acquires the property with a reduced bank financing that does not usually exceed 50% of the appraised value.
Taking the above data into account, the president of the FEGEIN, Benito Iglesias, believes that the “unfinished business” is the international buyer: “We must take advantage of the pull of Xacobeo to put Galicia on the route of foreign investment.”
