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5 Real Estate Challenges for Madrid in 2020

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Written by Daniella

The housing industry seems to be transforming at the moment, and price increases have slowed down a bit. Experts are, however, warning us to be cautious in 2020.

So that is why ShMadrid would like to address some of this year’s housing challenges. Interested? Keep on reading this blog article!

Related article: Do You Know Madrid’s Housing Cooperatives in 2020?

What are Madrid’s real estate challenges in 2020?

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Photo via Pixabay

If you are planning on moving to Madrid or buying your first home there, please take note of this year’s housing challenges:

1) More accessible housing, facilitating young people. One of the biggest challenges for young people in 2020 lies in the uncertainty of being granted a mortgage. New mortgage laws, the impact of the economic slowdown on the creation of jobs and low wages are all expected to have an impact.

Less and less people in Spain can afford to live independently, and this is also having an effect on the real estate market and the number of houses being sold. The damage being done to both the sales and rental market could eventually lead to a new housing crisis.

2) New housing developments. The government is implementing various measures to help people in Spain to have access to housing. First of all changes were made to rental laws, impacting the duration of a rental contract and setting a limit on the deposit that could be requested.

We are, however, also expecting that rental prices will be limited in the near future. Prices need to be influenced, in order to help vulnerable profiles to have a roof over their head. More affordable housing needs to be built as well.

Related article: How to Decide what Property to Buy in Madrid

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Photo via Pixabay

3) The impact of economic growth on the housing sector. Some districts in Madrid with newly developed homes show historically high prices, prices that are even higher than they were in 2007.

The city’s growth, compared to the rest of Spain, is expected to come to a halt or slow down, because the real estate cycle is years ahead of what is happening in other municipalities.

4) Recovery from the previous crisis. Statistics show that, compared to 2004, one million more people are employed, but sales have actually gone down with 30%. Mortgages have even decreased with 70%, although housing prices are not much different now than they were then.

This is an alarming development, and action must be taken to improve the situation on the real estate market.

5) Growth and world trade. The ageing population is increasing, and this is also adding to the risk of depopulation in the world. As a result, real estate investments from outside the country have decreased compared to the last couple of years.

Other developments, like the rise of alternative destinations, the bankruptcy of Thomas Cook and more expensive airfares (especially to the islands), are also expected to take its toll on holiday tourism, the hotel industry and, therefore, the entire real estate market.

Are there other challenges for Madrid’s real estate market in 2020?

About the author


Daniella loves to write and translate. Her bucket list is filled with beautiful places she still needs to visit.

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