Withdrawals from mutual funds, the decline in the profitability of rental buildings and inflation are putting pressure on the housing market. Mikel Echavarren, CEO of real estate consultancy Colliers International, warned Valencian developers yesterday “sector is on the Bali coast and a tsunami is coming”. On the opening day of the Urbe real estate fair, the director boosted the morale of professionals in the industry due to the excessive optimism of some entrepreneurs. Echavarren warned that the international economic situation is complex and funds took a conservative position.
The consultant stressed Expectations are not positive due to inflation. Echavarren explained that the increase in interest rates next year will have an impact of 12,000m euros on the pockets of Hispanics with variable mortgages, but the biggest problem is inflation. The monster is the effect of inflation, which will amount to 40,000 million euros. This will produce less consumption for families, lower purchase of newly built residences, decrease in the purchase of very cheap housing and in addition, Some of the people with less resources will have to sell their homes.” warned.
Ignacio Pareja, managing partner of Momentum Reim, money from funds is “stopped”. “The crisis in the UK is very serious. We have no idea about the panic,” he pointed out. The problem is that it was British and US funds that attracted real estate investment in Spain and the Valencian Community.
build-rent
A second problem is the rental construction (build-rent) segment, which is growing strongly due to the impossibility of access for a part of the population to purchase. Director of Momentum and Colliers warns The profitability of the projects rented from the building has decreased. and no longer of interest to major operators. “The numbers are not coming out. We are facing a problem,” said Mikel Echavarren.
Pareja acknowledged that it will affect the industry the most. loss of family trust The increase in interest rates will also have a very negative effect on purchasing power. “Home buyers are upper-middle-income, but the cost of inflation affects everyone,” he said.
no sun
On the other hand, Alejandro Escribano (father of the Valencia PGOU), warned: lack of land to build on. “There is not a lot of developable land at the moment. We are meeting the demand in a year and a half,” he said. One of the burdens of the industry is the delay in issuing licenses. To speed up processing as stated, “It is necessary to simplify the existing law of construction, Review the current General Plan, which has remained the same for many years, and also optimize consolidated land use”