Real Estate Crisis

October 23, 2017


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According to forecasts by Arrenta, firm specializing in secure rentals, real estate lease in Spain will grow by 50% between 2008 and 2009. The new economic and financial framework has caused a change in ideological and pragmatic in the rest of Europe the rental market already represents 30% of the overall housing market. In Spain only reaches 15% but growing demand and change of mentality that we see in much of the population and especially all the Strip which is part of the middle or low income allows us to predict that in a few years the rate will approach the European rate. In Spain, along with other countries that traditionally has been promoted the purchase of all kinds of property and special real estate (Great Britain and Mediterranean regions) have taken more years to qualify as a viable alternative to buying, renting. In the current situation the need, sometimes next to the obsession of getting a property has been replaced by less suffocating the rental option. Let us not forget that living in a housing is a staple for a family and even though in the last decade we have confused it with a speculative investment we should not forget that the initial nature of housing is rental or purchase is to use it to live.

If a Spanish family of average income obviating the evolution of the rate of interest that is used for reference in a mortgage, buying a home you will have to mortgage to 40 years and the same fee will be approximately 40% of their disposable income. Faced with this situation the couple ceases to have any kind of independence, can not reduce the income available to and in many cases you can not obtain longed property close to retirement. If we add to this a devaluation of the housing it is natural that families opting for leases. The rental and the saving rate as stated in the latest data average in Spain savings rate has declined considerably. It is natural to think that the economic crisis and the high rate of unemployment are the main cause of a very worrying fact.

However It is no exaggeration to relate the number of mortgages with low savings rate. Although in Spain the coming data per capita income are predictably less, a rent increase can also affect the saving rate. If we devote a minor part of our disposable income to real estate we can devote a greater share to other sectors and insurance consumption and savings benefit will be.