Spain’s real estate sector is experiencing an unprecedented surge. A record 357,533 home sales were registered in the first half of the year, the highest figure since 2007, according to Spain’s National Institute of Statistics. Yet, unlike the pre-2008 real estate bubble, this boom is driven not by oversupply but by a dramatic increase in demand—and a pronounced shortage of available housing.
Record Increase in Real Estate Agencies
The intense market activity has led to a wave of entrepreneurship. In the first half of the year alone, 10,637 new real estate companies were established, representing a 19.9% increase compared to the same period in 2023. This figure is more than double the 6,361 agencies created during the first six months of 2019, prior to the pandemic.
The creation of these new agencies has been especially explosive in recent months. While 1,442 companies were incorporated in January, the figures soared to 2,239 in May and 2,017 in June—the highest monthly numbers since records began in 2012.
Why Are More Agencies Opening?
This rush to open real estate businesses can be traced to lucrative business opportunities. With transaction volumes breaking records for both property sales and rentals, agencies are reaping rewards via healthy commissions. The high demand means that homeowners listing their properties are flooded with inquiries, prompting many to hire agencies to manage viewings and negotiations. For property sales, these commissions are frequently passed on to buyers, adding to agency appeal.
Rental transactions are also lucrative, though recent housing laws prohibit agencies from passing commissions to tenants. Despite this, some agencies flout this regulation, occasionally resulting in penalties.
Focus on Second-Hand Homes
Another key factor energizing the sector is the dominance of second-hand home transactions. Roughly 80% of sales involve resales, as new build housing lags behind. In fact, new home purchases in the first half of 2024 fell 55.1% versus the same period in 2007. For every new home sold, 3.5 second-hand homes change hands, emphasizing the vital role of real estate intermediaries.
Sector Leading Business Creation and Investment
The real estate industry has outpaced all others in terms of net company creation this year, accounting for 18.7% of all new Spanish companies—but only 12.9% of closures. The sector is also breaking records in terms of invested capital: from January to June, newly incorporated real estate firms attracted €1.38 billion in capital, far surpassing the next closest sectors such as construction and professional services.
What Does This Mean for the Market?
The explosion of real estate agency creation signifies both opportunity and challenges. While increased agency numbers reflect the market’s vibrancy and profit potential, the shortage of housing is pushing up prices and intensifying the competition for available properties.
For investors, professionals, or consumers considering the Spanish property market, this dynamic signals that expert guidance and timely action are more important than ever.
