The war between Russia and Ukraine could affect the housing market in Spain in various ways.

The war between Russia and Ukraine is expected to cause an increase in construction costs in Spain, together with a decrease in the availability of homes for sale in Spain.A heavy blow for builders, promoters, real estate agencies. And many other sectors that will be affected by the consequences that this war is generating in the financial system. 

With a situation of international political instability, investments in construction are going to be scarce and not only because of the increase in inflation of 1.4% more, but also because it is estimated that the Gross Domestic Product (GDP) may decrease by 1 .4%, limiting itself to 2.9%.

Yolanda Díaz, second vice president and minister of Labor and Social Economy, had already been warning about it. Being without a doubt the gas cut by Russia, one of the reasons that has most affected this situation.

What would it mean for the real estate market if our Gross Domestic Product (GDP) decreases?

Mainly, a decrease in the demand for housing. Since if there is less income (consequences of unemployment) and living costs more money (consequences of inflation), we will have a population with fewer possibilities of buying or renting a home. 

Increase in housing prices of new construction in Spain 2022

The war between Russia and Ukraine affects buyers, sellers and builders because it also costs more money to build a home in Spain; due to the rise in the price of raw materials and minerals. Although it is true that the seed that caused the increase in the price of raw materials was the multiple consequences of Covid-19. 

What raw materials needed for construction does Russia export to Spain? 

Palladium, platinum, gold, oil, gas, nickel, aluminum, coal, copper, silver and wheat are the raw materials that Russia exports the most. And it should be noted that nickel and aluminum today are at the highest values of their own value. Being the value of minerals and natural resources is the cause of the increase in the cost of building a house in Spain.

This conflict between Russia and Ukraine also affects Russian citizens who are not residents in Spain, since they are the foreigners who pay the most for real estate in Spain with an average of 2,691 euros per square meter.

If you are looking to invest in property in Spain, we are Naranja Spain, a real estate company specialized in buying and selling homes in Costa Blanca, Spain. 

If you want to invest in Spain, contact us. We speak Russian, Lithuanian, Ukrainian, Spanish and English.