Zaragoza attracts investors: housing prices have risen 90% in 12 years but remain highly profitable

In almost a decade, the cost that a buyer or renter must assume when buying or renting a home has increased by almost 90% in Aragon. According to Tecnocasa, which presented its market analysis this Wednesday at the Hotel Vincci, located in Coso, Zaragoza , the current increase in purchases is 89.6% compared to 2013, and in the case of rentals, it is 88.8% since 2014. In the last year, it is 15.3% and 10.8%, respectively.

For this reason, the real estate agency advocates encouraging purchases and asserts that the Aragonese capital is becoming a very attractive market for investors. The company’s area manager in Aragon, Carlos Alonso, asserted that now “is a favorable time to sell” if one is willing to do so.

He himself reaffirmed that Zaragoza continues to offer very high returns for investors compared to other major cities in Spain. “Zaragoza had been very restrained in terms of prices, and it’s time to take the plunge. There hadn’t been such a high increase yet, and it attracts investors. Returns are around 7 or 8%, but we try to attract buyers from the neighborhood. We have to say no to people who call us from other cities,” he asserted.

BIG DIFFERENCE BETWEEN MORTGAGE AND RENTAL

The difference is clear. Using a typical 68-square-meter home in Zaragoza with a sale price of €133,000, the real estate agency claims that the monthly difference between the rental income and the mortgage payment (80% financing over 25 years with an interest rate of 2.3%) can reach €342: from €809 for the rent to €467 for the mortgage payment.

This situation has also led to ” exaggerated ” demand for purchases, and the number of mortgages has grown by 8.6% in 2024, after Tecnocasa registered 8,025 applications for the purchase of apartments and 556 houses in the last year. “They are still mainly clients looking for first homes, but investor interest is also growing,” said real estate consultant Pablo Morata.

He himself has provided other data, such as that 89.1% of buyers are Spanish and 76.4% are employees with permanent contracts. The number of self-employed workers fell from 15.9% to 14.5% in one year, and more than half of new homeowners are already university graduates (51.9%).

WHAT DOES THE MARKET OFFER?

On the other hand, clients are primarily focused on purchasing homes priced between €75,000 and €150,000 —there is hardly any supply below this range, around 11.7%. 48.2% of the second-hand homes coming onto the market are between 40 and 60 years old, and just over one in three are already over 60 years old. Furthermore, four out of ten apartments on offer still do not have an elevator in Zaragoza.

The current real estate market situation also reflects significant differences between supply and demand. According to the director of analysis, Lázaro Cubero, demand from potential clients looking to purchase a property in Zaragoza has grown by 14% in the last year, and up to 40% compared to two years ago. ” The stock is lower than in previous years,” he stated, while also noting that all of this has also led to a 15% overvaluation in the Zaragoza market.

“Owners try to anticipate prices. They project increases, and we detect overpricing from individuals and agencies that aren’t specialized in the area. This lengthens sales times ,” he emphasized, citing that price negotiation has currently declined and that the time to close a sale takes around three months.

ON ALERT REGARDING DEMOGRAPHIC GROWTH

Another issue of interest is the population growth projected for the next five years, also driven by the increase in the foreign population. According to the INE (National Institute of Statistics), Aragon’s population will increase by 4% annually , which will generate a greater need for housing.

According to INE forecasts compiled by Tecnocasa, the current 994,855 inhabitants of the province of Zaragoza (187,590 foreigners) will increase to 1,033,618 by 2030. By then, 245,071 are expected to be of foreign origin. All of this also translates into a natural increase in rental prices, which are no longer available for rent below €600 in Zaragoza.

“It’s becoming increasingly difficult. All the measures proposed to rehabilitate homes or build new ones will be welcomed and appreciated by the population. We’ve already seen what’s going to happen. There will be more and more residents, and that supply must meet their needs. Everything counts, and hopefully it will be enough,” Lázaro reaffirmed.

For his part, Carlos Alonso advocated for finding ways to “guarantee the peace of mind of homeowners” when renting out their homes. “Many are afraid. There are cases in which homes are put up for sale because they have previously had significant difficulties collecting the agreed-upon rent,” the head of the department at Tecnocasa stated.

TECNOCASA

The Tecnocasa group is expanding throughout the country, except in a few markets such as Murcia, La Rioja, the Balearic Islands, and Galicia. It has 36 offices in Zaragoza and is preparing to open three more. It also has a presence in Utebo, Cuarte, and Huesca.

In Zaragoza, they have a 9.2% market share, and in 2024, they certified 604 sales transactions, 237 mortgages, and 323 rental contracts. These agreements are the basis for the figures published in the analysis presented this Wednesday.