Is the brick still a safe shelter? Only if you know how to use it

Norz Patrimonia’s partner warns that, despite regulatory uncertainty and growing costs, the brick continues to offer opportunities to those who know how to read trends and calculate risks

Is it a good time to invest in the real estate sector? This is, without a doubt, one of the questions we listen to the most every week by our clients. Real estate investment in Spain continues to generate interest, but also many doubts. In an environment where public decisions weigh more and more, where costs go up and demand changes in form, understanding the current market dynamics well is more important than ever.

So is the brick still a safe shelter? What segments have more potential? Where are the hidden risks? The good news is that, even in a less efficient and more intervened market than in previous years, they continue to exist interesting opportunities for those who know how to identify trendscalculate risks and choose the moment and the type of asset.

A market conditioned by politics

Broadly speaking, the Spanish real estate market is going through an intense intervention stage by the public sector. Regulatory changes, new tax proposals and certain political signals have introduced uncertainty, especially between international investors. Despite this, the general macroeconomic context remains reasonably favorable: GDP growth, consumer confidence and a solid structural demand, especially in urban areas and key tourist destinations.

Although many investors are fixed exclusively on the characteristics of the asset, it is convenient to remember that macroeconomy has a direct impact on real estate market behavior. A growing GDP – like the current one – is usually accompanied by more confidence, which drives demand and holds prices. However, if inflation remains high, interest rates could rise again, more expensive financing and reducing purchase capacity. In short, it is not possible to understand the real estate market without analyzing its economic context.

Sectors with greater appeal

Each investment profile requires a different strategy, but there are segments that highlight at this time due to their attractive risk-reasons:

• Hotels: They continue to show solid growth, driven by international tourism in maximums, a high Revpar and the weakness of competitors. There is visibility, liquidity and positive projections in the coming years.
• New construction residential in Prime Zones: Soil scarcity and high demand hold prices even in less favorable junctures. His resilience makes him a defensive commitment.
• New niches with strong projection, such as Coliving or Senior Living and Data Centers. Each of these models responds to deep macro-sends that will continue to mark the market in the coming years.

In any case, not everything is optimism. Real estate investment, like any other, entails risks that do not get underestimated. The Low liquidity and price volatide are an inherent part of the real estate asset And they can make the final profitability not adjust to what is initially projected.

RISKS AND INCREASE COSTS

In addition, in recent months there has been a slight increase in defaults, both for rent and mortgages. This, together with maintenance costs, directly affects the margin of the investor and must be part of the analysis prior to any decision. At the promotion level, Construction costs have also increased, What has forced solutions: from industrialization and prefabricated to contracts with maximum prices are partial transfers of cost overruns to the final buyer.

And what can public investment contribute? The recent announcement of a plan to triple investment in social housing, with 7,000 million euros, can be a turning point if it is effectively executed. Currently, Spain has a public housing park much lower than that of other European countries, which contributes to the pressure on the free market.