Basque Country | Update on the real estate market February 2023

Basque real estate market

Even in the global economic context, the attractiveness (and prices) of the Basque Country is not weakening for the moment. Indeed, there has been a 4% growth in the population along the Basque coast, and an 18% growth over the last 9 years in the municipalities a little further from the coast.

In this article, we will talk about the economic and regulatory issues that may have an effect on the real estate market in the Basque Country in 2023.

 

The government is trying to make real estate more affordable

The government has taken steps to make real estate more affordable by taxing it heavily second homes and giving back a lot more difficult to run profitable businesses around house flipping, AirBnB rentals and vacation homes.

New tax laws came into effect this year which increased tax on rental income from 17% to 40% for landlords whose annual furnished rental income exceeds €23 or whose rental income exceeds the sum of their earned income.

All these measures combined will surely make vacation rentals less profitable in the future, but so far it has not had any noticeable effects on the real estate market in the Basque Country.

 

Banks are more cautious

Starting in 2022, home loans have been reduced, and this will only get worse in 2023, making it harder and harder to get a loan approved.

Banks are lending less and less and we are entering a period of global economic crisis, in particular due to the war in Ukraine and tensions on the energy markets which have considerably increased the cost of materials and therefore of renovation.

The Russian-Ukrainian conflict influences interest rates

The increase in the price of energy and the rise in direct inflation lead to the rise in interest rates decided by central banks to try to contain inflation.

 

Legislation on “energy strainers” has taken effect

Since the 1er January 2023, housing whose energy consumption exceeds 450 kWh per m² per year are no longer authorized for rental.

Sellers of F or G classified housing who cannot afford to do the work to bring the insulation up to standard will no longer be able to rent, so their goods will surely come up for sale at lower prices.

 

Real estate in the Basque Country | Shelter ?

Despite the rise in interest and usury rates, the induced increase in the purchase price and the regulations on second homes, the real estate market in the Basque Country continues to do well if we compare it to the financial market, which is increasingly more volatile or even to cryptocurrency.

For houses in Biarritz, for example, prices are still hovering around €9000/m2, and even if they are no longer rising regularly, they are not falling.

By contrast, we are still in the early stages of a global recession that began in late 2022.

This is likely to turn into a major global recession, and weaker economic growth will certainly impact real estate markets, but that said, Basque real estate remains strong for now.

Bayonne real estate

 

O'Plus Real Estate | Other real estate

The creation of O'Plus Immobilier comes from the notoriety of the brand and the excellent reputation of the Brocante O'Plus, present in Anglet for nearly 30 years and from the desire to sweep up the area. traditional real estate, to dust off methods and above all to refocus on human relations. Trust, respect and honesty are key values ​​all too often flouted in this profession.

So, let us trust each other and come and present your project to us!