An Analysis of Nearly 28.000 Home Conversions Since 2021

The demand for housing continues to grow at a time in the residential market when supply is scarce and shows signs of falling. This is one of the reasons why the price of housing has not fallen in Spain, despite the brake that was expected with the rise in interest rates to access a mortgage. According to the latest idealista price report, the average price of used housing for sale rose by 7% year-on-year in March, to 2,079 euros/m2.

Faced with this shortage of residential supply in the market, new ways to get a house through the change of use of a property of another typology to housing are emerging more strongly. According to data from idealista/data, based on information stored by the General Directorate of Cadastre, since the end of 2021 there have been more than 27,700 changes of use in Spain to housing from another type of property, mainly from industrial use, storage or commerce.

2021-2024 | Change of use from real estate to housing

Total volume (in units) of changes of use of the property typology to residential use

Change of use to housing	Volume (units)	Quantity (%)
Storage	7.538	27,2%
Commercial premises	6.167	22,2%
Sport	1.022	3,7%
Teaching	174	0,6%
Shows	12	0,0%
Hotel	1.832	6,6%
Industry	8.281	29,9%
Offices	2.266	8,2%
Other Uses	215	0,8%
Public	38	0,1%
Religious	184	0,7%
Spain	27.729	100,0%

Source: Catastro 

These changes of use can be made from a large company to convert a hotel into a residential building, to a small investor who decides to buy a local in a low and transform it into your home. But let's make it clear from the beginning that it is not an easy task, but it is not impossible either. It requires time, administrative procedures of obligatory fulfillment and to know the expense that supposes to obtain this change of use.

It is very important to know if the property is located in a developable area and if it is possible to change its use. Therefore, it is necessary to make an urbanistic consultation to the corresponding town hall. If the change of use is possible, a license with a technical project must be submitted. This whole administrative process can take time and money, in some cases more than a year. It is necessary to comply with the requirements of habitability, accessibility and efficiency, in addition to taking into account the costs of the reform to make it possible to live in that property. It is key and indispensable to turn to experts in town planning and architects to bring it to a successful conclusion, from the presentation of the project, during the works in progress until the habitability certificate is obtained.

Changes of use from industrial and warehousing to residential are the most common in the market.

With the data from the Cadastre, a study has been prepared by provinces on the main changes of use made to housing. In total, just over 27,700 changes of use from other real estate to housing have been made since the third quarter of 2021. Almost 30% of them correspond to industrial uses, followed by 27.2% for storage use or 22.2% for commercial use. Between these three typologies, they account for almost 80% of all changes of use.

Other changes of use that have taken place have also been made in offices, hotels, or even religious buildings, sports centers, schools and even public buildings, which by volume may be larger, but which, when measuring the changes by units, and not by surface area, have a smaller volume than the rest.

2021-2024 : Provinces : Change of use of real estate to housing

Total volume (in units) of changes of use of the property typology to housing registered in the Cadastre, and main types of modifications.

Province	Total changes	Main change of use of the property (1)	Units	Main change of use (2)	Units
Madrid	3.625	Commerce	2.330	Office	512
Barcelona	2.233	Commerce	832	Storage	538
Pontevedra	1.624	Industry	722	Storage	596
València	1.255	Storage	505	Industry	332
Las Palmas	1.074	Hotel	567	Commerce	274
Sevilla	1.035	Storage	346	Commerce	289
Burgos	963	Industry	723	Storage	103
Málaga	839	Commerce	327	Storage	198
Baleares	804	Storage	212	Commerce	149
Murcia	760	Industry	217	Storage	212
A Coruña	742	Almacenamiento	306	Industry	181
Cuenca	701	Industry	561	Religious	46
Alicante	695	Storage	276	Industry	181
Jaén	676	Industry	416	Storage	148
Girona	667	Storage	291	Commerce	131
S/C de Tenerife	590	Hotel	193	Industry	133
Toledo	570	Storage	238	Industry	203
Almería	520	Industry	277	Storage	128
Cádiz	516	Storage	167	Commerce	145
Córdoba	500	Storage	152	Commerce	146
Albacete	474	Industry	223	Storage	211
Badajoz	466	Storage	203	Industry	159
Cáceres	425	Storage	217	Industry	123
Ciudad Real	406	Industry	193	Storage	139
Ourense	366	Storage	160	Industry	133
Castellón	339	Industry	159	Storage	117
Tarragona	330	Industry	149	Storage	81

Source: Catastro

The most common change of use to housing among the provinces is that which has been made on industrial properties, generally small workshops, in up to 25 Spanish regions, where the figures in Burgos (723), Pontevedra (722), Cuenca (561), Jaén (416), Almería (277), Albacete (223) or León (221) stand out.

The next most important change of use was storage, leading in 17 provinces, with Valencia (505), Seville (346), A Coruña (306) and Girona (291) standing out, as well as Alicante (276), Toledo (238), Cáceres (217) and the Balearic Islands (212).

The most common change of use to housing in the large markets was commerce, with more than 2,330 in Madrid, 832 in Barcelona, or 327 in Malaga. Meanwhile, in the two Canary Islands provinces, the change of use from hotel to housing was the most widespread, with 567 in Las Palmas and 193 in Santa Cruz de Tenerife.

In the provinces of Madrid and Barcelona, the change of use from offices to housing also stood out for its volume, with more than 500 in the former or more than 340 in the latter, and also for storage, with more than 530 modifications in the Catalan province or 430 in Madrid.

Provinces | Percentage of difference between residential prices and prices for the most common uses

Prices are from the price reports of real estate portals (euros/m2)

Province	Commerce	Office
Baleares	173%	149%
S/C de Tenerife	150%	57%
Barcelona	140%	54%
Alicante	132%	93%
Guipúzcoa	118%	101%
Álava	117%	115%
Girona	114%	114%
Lleida	113%	60%
Vizcaya	112%	65%
Lugo	102%	80%
Madrid	97%	73%
Zaragoza	97%	52%
Las Palmas	96%	55%
Pontevedra	95%	116%
Tarragona	92%	74%
Castellón	89%	88%
Cádiz	86%	108%
Málaga	86%	80%
Huesca	84%	79%
Asturias	80%	17%
Guadalajara	80%	72%
València	80%	36%
A Coruña	75%	13%
Navarra	73%	95%
Huelva	72%	72%
Toledo	66%	22%
Murcia	63%	109%

Source: Catastro

In fact, according to data from idealista, the price difference between a property for residential use and another for industrial or storage can be tripled in most cases, although in provinces such as Zaragoza, Huesca or Lugo it can be multiplied by up to seven. In large residential markets, such as Madrid, Barcelona, Valencia, Malaga or Alicante, the differences are found in differences that multiply between three and four times the value of non-residential use.

The biggest price differences between a home and a commercial property can be observed in the Balearic Islands, Santa Cruz de Tenerife, Barcelona or Alicante, more than doubling the prices in these areas. In total, in 10 provinces the price difference is doubled. In Madrid, a difference of 97% is observed, while in Valencia it is 80%, with Seville or Murcia 'equalizing' somewhat more, up to 63%, respectively.

However, the price differences between offices and homes are most notable in Seville, the Balearic Islands, Pontevedra and Álava. Another four provinces show that housing prices are more than double the values of office properties. The differences are more relative in offices in Malaga (80%), Madrid (73%) or Barcelona (54%), while in Valencia they are 36% higher. There are even seven provinces, including Cuenca, Jaén and Cáceres, where the price per square meter of office space is higher than that of housing.

Nearly 2.000 changes of use from hotel to residential use

Changes from hotel to residential use have accounted for 6.6% of total modifications since the third quarter of 2021, with almost 2,000 units. We highlight them above the rest because they are usually modifications on larger volumes in square meters.

To the changes already highlighted, experienced in the two Canary Islands provinces, there were also modifications in provinces such as Barcelona (172), Baleares (143) or Murcia (132). Somewhat further back, Seville (95), Girona (53) or Cadiz (49) also appeared. In Madrid, there were 21 changes of use from hotel to housing.

2021-2024 | Change of use from hotels to housing

Changes of use from hotel typology to housing and highlighted provinces

Provincia	Units
España	1.832
Las Palmas	567
Santa Cruz De Tenerife	193
Barcelona	172
Baleares	143
Murcia	132
Sevilla	95
Málaga	60
Girona	53
Cádiz	49
Cuenca	33
A Coruña	24
Madrid	21
Pontevedra	19
València	18
Cáceres	16
Badajoz	15
Jaén	15
Toledo	15
Burgos	14
Almería	12
Segovia	12
Guadalajara	11
Ourense	11
Asturias	10

Source: Catastro

Other changes of use: office, sports or educational uses

Other properties that have changed their use to housing include offices (8.2% of the total), sports facilities (3.7%) and educational facilities (0.6%). As we have already mentioned, Madrid (512) and Barcelona (342) account for the main changes of use from office to residential, followed by the Balearic Islands (128), A Coruña (91) and Málaga (88). In all of them, their weight exceeds 10%, above the national average.

On the other hand, Pontevedra (140) stands out in changes of use from sports to housing, ahead of Madrid (71) or Murcia (70), while in La Rioja or Granada, sports use exceeds 10% of the total changes of use in both provinces.

Likewise, the provinces with the highest number of changes of use of educational properties to housing are Madrid (39) and Barcelona (27), exceeding 1% of the total in each area. In A Coruña (11) and Valencia (10) they also exceed two digits.

Según los datos recopilados y analizados, la 'proptech', que proporciona información destinada a un público profesional para facilitar la toma de decisiones estratégicas, tanto en España, Italia y Portugal. Utiliza todos los parámetros de la base de datos de los portales inmobiliarios en cada país, así como otras fuentes de datos públicas y privadas para ofrecer servicios de valoración, inversión, captación y análisis del mercado.

*Source: idealista.com

#change of use # property in Spain # buy property # invest in property # land registry # living in Spain # holiday home # tourism # domtenerife

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