Housing recovery boosts real estate start-ups across Europe

The real estate market continues its resurgence in Spain, driven by the recovery in house prices and increased demand for renting and buying. In 2017, 10,627 companies opened in the real estate, finance and insurance branch, 29.7% more than the previous year. In January alone, the balance was 1,044 openings, compared with 706 in the same month of 2017. Employment data also confirm the trend: according to the Labour Force Survey (EPA), employment in the sector is above 2008 levels. In many neighbourhoods, real estate agencies are starting to re-emerge in the streets where the shutters went down with the bursting of the bubble.

The phenomenon of new real estate agencies opening took off last year, and the acceleration continues at the start of 2018. According to the National Statistics Institute (INE), 1,044 real estate, financial and insurance companies were created in January alone, representing a year-on-year growth of 47.9%. In terms of the number of new establishments opened, the sector is second only to commerce.

"Every 50 metres there is a real estate agency", says a worker at the company Tengo tu casa, which buys, sells and rents flats on Calle de Alcalá in Madrid. From the door of this shop you can see three other establishments of the same business. This group has five branches in the capital, and opened the one in Alcalá less than a year ago. "We are not worried about the competition because we are a group, but I understand that other real estate agencies are noticing a drop in customers," explains one of the ten sales staff.

Fabián Cabellos, a Vivienda Madrid franchisee for the last year and a half, is also located on Calle de Alcalá, a few numbers up. "I worked with this real estate agency for five years and now I have decided to open a franchise of the same brand. Many of my colleagues have done the same, last year four new offices were opened all over Madrid," he recalls. "The creation of new real estate agencies is driven by the recovery of the market, the price of housing and the increase in the number of sales transactions," explains Lázaro Cubero, director of Tecnocasa's Analysis and Reports Department. In 2017, the highest rise in house prices since before the bursting of the bubble was recorded, with an average of 6.2%, according to data from the INE. As for rentals, 2017 closed with the highest increase in 11 years, with rents rising by an average of 8.9%.

By: Ana Lucrecia Miranda Escorcia