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Housing investments continue, but how will the new Housing Law affect this year?

In recent data, BBVA has mentioned that the economy is holding up better than expected, however demand will be limited in 2023 due to the increase in interest rates. Efforts to access housing will increase.

But what could the new law affect?

According to experts, it is uncertain whether the change will be positive or negative, but there will certainly be a change. The fact of regulating rental prices could rather motivate owners to sell their properties instead of renting them.

For now it is still too early to give an answer with certainty as to the long and medium-term effects that the new Law will have. So far, several experts fear that the Law, which aims to increase the supply of rentals, may cause the opposite effect to the one desired.

For now, we continue to have a high demand since, according to studies, more than one million homes are needed to meet the current demand. Some would even recommend investors to buy homes to rent. So far, investing in housing in Spain is still a reasonable idea. For this it is crucial to be informed about taxation, in addition to opting for a fixed mortgage.

However, it is necessary to wait for the results of the new Housing Law. This is due to the fact that some changes have already begun to be noticed, such as, for example, the decision that many owners of rental properties are making by moving them to tourist accommodations, due to the restrictive requirements.

Conditions such as setting a 'cap' of 2% this year and 3% in 2024 on the rental price is already causing, for example, the usual rent in Castellón to deflate.

The result is that real estate agencies also feel insecure and question the Law because of the obligation not to charge tenants for their services, since it is an arduous process that is carried out to help both the tenant and the landlord at the time of renting a property.

The positive thing is that demand continues, mentioning foreign sales and purchases that had been increasing since last year to almost 10% in the second half of 2022.