Residential building construction costs have skyrocketed between 40% and 50% since 2015, according to data released yesterday by CBRE. This circumstance has caused a growth in the price of new construction homes, which will rise by 5% in 2021 and 6.5% in 2022, according to the consultancy's calculations.
The significant increase in construction costs is due to the sharp rise in the prices of raw materials, such as aluminum, wood, steel and cement, further aggravated by the shortage of professionals and by the increase in energy costs.
CBRE's forecast for new construction permits is around 85,000 for this year and a similar or slightly higher figure for next year.
Another aspect that CBRE highlighted in its report on housing is the enormous appetite of investors to develop the rental market. The report highlights the high investor interest in build to rent opportunities, with 1,012 million transacted in 2021, 28% more than in the first nine months of 2020. This year around 5,100 dwellings are being developed for this model (until the third quarter).
In this sense, the residential rental market represents 24% of total investment in Spain, with the forecast of exceeding 2,000 million euros at the end of the year. “There is tremendous demand from the investment sector, especially from international, Anglo-Saxon and German funds, which represent 80%, of the total investment” said Javier Kindelan, vice president of CBRE.
