Neinor Homes (1K) | Buy | Entry opportunity after the derating

Research evidence excerpt

Neinor Homes (1K) | Buy | Entry opportunity after the derating

Neinor Homes Buy | Target Price: EUR19.60

Is the residential cycle running out of steam?

Understanding demand drivers

Spain has emerged as one of developed Europe's most dynamic residential real estate markets

in the post-pandemic period. Since 2020, retail transaction volumes have averaged c.650k units

annually, well above the c. 400k average recorded during the post-crisis decade (2012-19) and

approaching the c. 750k reached during the previous boom years (2002-07).

Price dynamics have tracked volumes, with property prices accelerating from low single digits in

2020-23 to double digits since 2024, reaching c. +13% YOY as of Q1 2026. In the most dynamic

regions, real property prices have now surpassed their previous peak.

Chart 1:Monthly transaction volumes (January 2007 - April 2026) Chart 2:Nominal house price index (Q1 2007- Q4 2025)

Source: INE, Kepler Cheuvreux Source: INE, Kepler Cheuvreux

Several factors have converged simultaneously, but the common thread is Spain's overall macro

picture, combined with the appeal of Spanish properties for foreign buyers, underpinned by

their relative affordability in a context of global demand.

We describe some of the drivers in more detail below:

Household creation: Spain has added c. 1.2m households over the past five years, equivalent

to c. 6% of the total, mainly driven by migration inflows drawn to a relatively dynamic labour

market and a c. +30% increase in the minimum wage over the same period. Structurally, the

ongoing decline in average household size - a trend common across developed economies - is

adding a further layer of demand.

Real GDP growth: Real household income has gained a mere c. +6% cumulatively since 1995,