Young people are the great engine of the housing market in Spain, above other more mature age groups, despite their enormous difficulties in saving money due to their job instability and high youth unemployment rate. This prevents them on many occasions from being able to embark on the purchase of a home, which is what they would most like, and leads them to the rental market, despite the fact that a relevant 37% consider that it is “throwing money away.” María Matos, Director of Studies at Fotocasa, analyze for 20minutos the situation, perspectives and problems of access to housing for young people in Spain.
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The age of emancipation It has been years behind in Spain. 40% of young people under 35 years of age still live with their parents. As a result of the pandemic, have young people maintained less, greater or the same level of activity in relation to the real estate market?
The impact of the coronavirus in Spain has meant that young people have increased their interaction with the real estate market by 2 percentage points from 2019 to 2020 and have maintained it in 2021, despite the uncertainty.
What is most striking is that, although economic and working conditions have been reduced by the pandemicThey have not thrown in the towel and have increased their participation, thinking that a time when the market is agitated, it can be positive to find good opportunities. This reflects their nature of daring and hope in the face of changes.
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Despite everything, are young people the great engine of the housing market?
Yes, they are the great engine of the market, because they are the ones who participate the most, well above the most mature age groups (14 percentage points more). Therefore, their movements and actions are very relevant and have a firm impact on the market. Above all, in the rental market, since they are the group that most interacts with rents.
What changes has Covid-19 brought, young people are looking for more houses to buy or rent than before the coronavirus?
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As we see in the graph, they are now looking for more rent than before. It is true that during the impact and the first 6 months of the pandemic, the rental market lost several points to the detriment of purchases, as it is a much more volatile market in the face of changes. However, now, we see that it has not only returned to pre-pandemic levels, but has surpassed them.
Have the conditions of banks when granting mortgages tightened for young people for fear of default?
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More and more, financial institutions are daring to bet on this group, and are including it in their plans. This is a reflection that the financial sector is beginning to understand the importance of under-35s for the real estate market. Banks are working to create attractive mortgages and attract this group, despite the difficulties they present when complying with the mortgage loan requirements, due to their precarious employment situation.
What main reasons lead young people to change their home?
What stands out the most is that the main reason that young people seek housing in the rental market is because they cannot buy. That is to say, their main impulse is to buy, but because they cannot, they are forced to look for housing in the rental market.
What percentage of young people think that paying rent is a waste of money?
37% believe that it is a waste of money, 40% consider that a home is insurance for the future and 48% say that it is a long-term investment.
Is the price barrier still the big problem? What percentage of their salary do young people spend on rent or paying the mortgage?
It is not the price of the house itself, since at the moment we are 37% below the maximum prices reached in the years of the real estate boom, but the eternal whiting that bites its tail. Without decent working conditions, they cannot save enough to face the initial investment of the costs of a mortgage, nor pay that 20% that the bank does not finance them.
They cannot save enough to face the initial investment of the costs of a mortgage, nor pay that 20% that the bank does not finance them
According to our joint study with Infojobs, an average Spaniard spends 41% of his salary to pay the rent of the house, and has to save an average of 6 years to be able to access a mortgage when buying a house.
An average Spaniard spends 41% of his salary to pay the rent of the house, and has to save an average of 6 years to be able to access a mortgage
What could the different administrations do to try to solve it?
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In the first place, the real estate sector, in collaboration with the public administration, must commit to responding to this demand by promoting affordable housing for this group. In Spain we have a public park well below the European average: 2% compared to 18% in the United Kingdom, 23% in Austria or 32% in the Netherlands.
In Spain we have a public park well below the European average: 2% compared to 18% in the United Kingdom or 32% in the Netherlands
But in the short term we must increase the affordable housing stock for this group. It would also be positive if the administration entered into collaboration with rental housing management entities for the provision of a significant percentage of its housing stock for affordable and social rent. Young people deserve to be able to access housing as easily as previous generations did. There are already administrations such as in the Region of Murcia, which are serving as a public guarantee for that 20% that young people need to access a mortgage.
Has the number of young people who, as a result of the growth of teleworking, seek a home in the so-called emptied Spain, where the price of housing is much cheaper, has grown?
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We do not have data broken down by age, but we have detected a great demand towards the periphery of large cities, caused by the phenomenon of teleworking. We are seeing it in the searches for housing in Fotocasa: in the areas furthest from the cities, the demand for housing has increased exponentially.
So after a year of pandemic and teleworking, the number of people who want to get rid of small flats and look for bigger houses with access to the outside increases, causing a certain exodus from the big cities to more distant but affordable urban centers.
Do young people think that the price of renting and buying a house will grow in the coming months or do they think it will fall?
This question is very interesting, because although those under 35 years of age perceive prices as very expensive, both in purchase and rent, as the graph indicates, it is the first time in six years that they have the perception that the market temperature is has cooled down. Because the idea that we are close to a real estate bubble has gone from 7% to 6.1%.
This indicates that they themselves, on the street, although they perceive prices as very expensive, are not increasing. In fact, it is a perception completely in line with reality, especially in the rental market, where for 8 months, it has been presenting continuous price drops.
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