2024-01-03 11:13:45
33% of Spaniards affirm that the increase in inflation or the increase in the cost of some products and services has had a “quite or a lot” impact on their intention to purchase or rent a home. This is a percentage that remains practically the same as in August 2022 and February 2023, which indicates that the effect of inflation on the housing market persists over time, despite the fact that the CPI was gradually lowered from the maximums reached in the summer of 2022.
More precisely, a survey of Fotocasa Research based on more than 5,000 interviews specifically indicates that There are 17% of Spaniards who have stopped the process of buying or renting a home as a result of inflation and another 16% who are reconsidering whether to continue with the same process..
“The data from this analysis reveal that there is a high percentage of potential buyers who, faced with the great increase in rates in recent months, have decided to stop the purchase process and another group is reconsidering. But it is very important to keep in mind that these potential buyers will be very attentive to the evolution of the Euribor during 2024 and possible mortgage offers and will surely embark on purchasing a home as soon as the mortgage situation normalizes. It will be very important for the sector to be prepared for this demand, which will be intense as soon as the Euribor drops again,” comments María Matos, director of Research at photo house.
As seen, and understandable, more than half of individuals over 18 years of age (54%specifically, two percentage points less than six months before) They did not plan to buy or rent housing and, therefore, they lack intentions that could suffer an impact due to the increase in prices.
Mortgage costs have more impact
But the effect of the rise in mortgage loan interest on the real estate market is much more relevant. It is a variable that registers significantly higher incidence percentages.
So, in this case, There are 21% of individuals who were in the process of purchasing a property and have stopped the process due to the increase in mortgage costs that has caused the rise of the Euribor.. It is the same percentage as in February, but six points above the 15% registered in August 2022. They are the ones who assure that the increase in prices has impacted their intentions ‘a lot’, enough to stop the process in which they were found.
For their part, those who admit that inflation has affected their plans ‘quite a bit’, and that for this reason are reconsidering continuing with the active search process or final purchase of the home amounts to 16%, one point more than in February. In total, the sum of both groups (housing applicants who have interrupted the process and those who are considering doing so) stands at 37%, when a year before they were 31%.
Besides, another 7% assure that inflation has had ‘little’ impact on their intentions (one point more than in February), while only 5% affirm that this situation has had no effect on their previous intentions.
More incidence among young people
Another aspect analyzed in this study is the impact that inflation has on the population depending on their age and place of residence.
Thus, if we look at the effect of inflation and mortgage costs on real estate claims We see that this is not distributed equally among all age groups, but rather it is the younger groups, those under 35 years of age, who claim to feel more impacted, while those over 55 show less wear and tear.
Among those who have between 18 and 24 years old, there are 43% who assure that the price increase has had a great impact (enough to give up the search) or enough (they consider giving up) in their real estate aspirations. Regarding the incidence of mortgage costs, the percentage of 43% of young people aged 18-24 who have been impacted a lot or a lot is repeated.
If we scale to the next age group (35 to 44 years old) the percentages are even higher: Inflation has affected 47% of them a lot or a lot and the increase in the cost of mortgage loans has also affected 47%. This data is especially relevant because we are referring to the most active age segment in the market.
On the contrary, when we move up the age groups we find less intention to purchase or rent and, consequently, also less impact on real estate claims. For example, Among those over 55 years of age, only one in three people intended to buy or rent. Consequently, inflation has affected 24% of them a lot or a lot and the rise in mortgages has affected 28%.
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