Multifamily. Record demand and rising rents drive long-term growth in the build-to-rent sector
The Living sector has continued to demonstrate its strength, with residential rental properties as the main driver
Investment in the Living sector already represents 25% of real estate investment in Spain, while the Multifamily sector accounted for 57% of this investment in 2022, driven by an unprecedented demand for rental housing that the current supply is unable to meet.
Investment in residential rental properties amounted to a record €2.3 billion in 2022, in line with 2021, when it also registered a maximum in the historical series. Based on these figures, the Multifamily sector was the main driver of investment in the Living sector in 2022.
The funds continue to be highly dynamic and their investment in the Multifamily sector in Spain has continued to rise over the last few years, despite the current economic climate. Investors are also showing growing interest in government-subsidised housing and luxury housing. The economic climate — influenced by rising interest rates and bond yields — caused prime yields to rise by 50 basis points in the last half of 2022, after a period of yield compression up until the third quarter of last year. This trend of rising prime yields is expected to continue throughout 2023.
There are currently 18.9 million households in Spain and this figure is expected to continue to increase over the next 15 years, reaching 21.6 million households by 2037. According to our estimates, the number of households that rent could exceed 6 million by 2037, which contrasts with the 4.7 million that there are currently.
Download our report ‘Multifamily. Record demand and rising rents drive long-term growth in the build-to-rent sector' and learn in detail about Build to Rent's performance during 2022 and the sector's outlook for the coming months.
Note: This report was produced before the agreement for the approval in Congress of a new Housing Law.
