New technologies and tourist apartments
That the real estate sector is on the path to recovery, is already evidenced after eight consecutive quarters of an increase in the price of housing since the second of 2015. An improvement with a moderate rise that is viewed with optimism, since before there were 26 Quarters followed by year-on-year declines, which began at the end of 2008.
One fact that reflects the “joy” of the market is the return of the real estate to the specialized fairs, an investment that in the years of crisis had been completely rejected. For example, SIMA has counted in its 2017 edition with 13,000 square meters of space, 25% more than in the 2016 edition, and 275 exhibitors, 20% more than last year.
Another sign is that turnkey promotions represent only 15% of the residential offer when in the last edition and for the same period it was almost 40% or around 90% in 2010 and 2011, and this is why the depletion of the stock originated up to 2008 and that has gradually been reduced until leaving open the door to new promotions, generators of a new offer that creates employment and wealth.
However, there are many unknowns that remain to be solved in a market dominated by large investment funds and financial institutions, as well as new formulas to market and put into operation a product traditionally desired by investors such as housing.
The new technologies and possibilities that media such as airbnb, homeaway, hometogo and similar offer are unlimited, bringing the small investor or owner to a commercial network that was previously only possible for large international companies.
However, like almost everything that grows exponentially and at unforeseeable speeds, the sudden launch in the market for tourist or vacation rental of a number of places that according to a recent Exceltur study reaches 362,493 units, from only 20,913 units in 2012, Surpassing thus the number of total hotel places in Spain by almost 10%, has been an earthquake that the Administrations are trying to limit.
One of the effects has been the increase in the price of residential rental for domestic use, especially in places where tourist pressure invites owners to obtain high returns through high turnover and short stays, sometimes in a poorly regulated and supervised environment.
This situation becomes evident and especially problematic in areas with great cultural attractiveness like Barcelona, or vacation like the Balearic Islands, where for example in Ibiza, it has become an odyssey for temporary workers: doctors or teachers for example, to find a home at a price that does not exceed their salaries.
This is not intended to demonize a legitimate and absolutely viable business with high profitability, but if you realize that to develop it must comply with the local and regional regulations necessary to free us from future headaches for not having foreseen the requirements, administrative procedures and Authorizations necessary to start up its operation.
Adjusting a home to this use will be much easier when it is in construction or rehabilitation period, with the possibility of adjusting and conditioning it to the necessary legal requirements. Logically this possibility will depend on the type of housing that we are acquiring. If we talk about a real estate promotion of 100 homes, it will be very difficult for the developer to make the necessary adjustments to a single unit, since its margin will depend, among other factors, on the escalation of costs by standardizing qualities, project, interior divisions, etc.
However, this can be a perfectly viable alternative in small rehabilitation promotions, especially if they are located in urban streets with attractive tourist destinations, since before making an investment decision, we must logically predict whether the exploitation of the asset will cover our expectations.
Mistral develops in the street Santiago Santiago 9 of A Coruña, a rehabilitation of 7 houses that due to its situation and context is particularly suitable for this type of activity.
Because of its small size, it is possible to pay attention to, at the request of the buyer, all the necessary requirements so that a possible tourist exploitation is freed of any problem that in the short term can be found, all taking into account the speed with which Town Councils and Autonomous Communities are worrying about this activity being in line with the regulations.
In this way the owner will find himself not only with the tranquility of carrying out a patrimonial activity compliant to the law, but also with a competitive advantage in the short and medium term, since other houses destined to the same purpose and, as a consequence of its state of consolidation, structure, membership of a community of neighbors, etc., will not be able to adapt to the regulations of application and as a consequence will be forced out of the market, which is becoming more demanding, or risking sanctions derived from irregular exploitation.