2023-12-16 10:17:56
Like every week on MoneyTalks, Javier Ruiz brings down the main economic headlines of the week
On this occasion he analyzes the reasons why housing prices have continued to rise despite the rise in mortgage prices.
“Those who depend on a payroll are further away from being able to buy a home every day,” explains our analyst.
The decision of BCE to maintain interest rates unchangedin it 4,5%with an eye already set on a cut that could arrive in 2024, represents a relief for the mortgages although the real estate market continues at exorbitant levels. Like every week on ‘MoneyTalks’, Javier Ruiz analyzes the reasons for this maelstrom of prices and How could this escalation be stopped?.
Even if interest rates are not going to go down until next year, probably in March, April, or May, mortgages are going to start getting cheaper now. The reason is that the Euribor It is far ahead of the ECB and is already falling. In fact, it is below the 3.7% level for the first time since April. So those who review their mortgage every six months, the next time they do so they will pay less, true not much, but welcome 15 or 20 euros less per month. And now that May has arrived, everyone will see how this mortgage stress that we have been suffering is beginning to relax.
High rates, stingy banks and sky-high prices
The most curious thing is that in a context of tall guys y stingiest banks los housing prices are going up. When it is increasingly expensive to borrow and banks give you less than what you ask for, this defiance of the law of gravity is quite surprising. Today if you want to buy a home for 100,000 euros you have to have 42,000 saved, almost half of the house. But in 2023 the price of housing has risen on average by 11%. If we look at the accumulated, since 2015 Housing has increased its price by 50%, new housing by 72%. How is it possible that it continues to rise?
There are two reasons that explain it. First of all, there is a lot coming in foreign buyer and a lot of foreign institutional funds that are acquiring housing to speculate. And they are doing very well because the market continues to heat up. This families pay it that they cannot access there because they are competing with large capitals from other countries. In fact, the 30% of real estate operations in Spain they are already with foreign capital.
Secondly, the spanish homes there are more and more sole proprietorshipthat of two people as much. In the 70s, the typical household was made up of four people; Today are 2,5. Therefore, people need more houses and a demand problem. We have a lot of people looking for a home and willing to pay whatever it takes.
Every day further away from being able to buy a house
The reality is that no one has seen their salary rise by 82% in recent years, which is what has increased the price of housing in Madrid, for example. Those who depend on a payroll, every day are further away from being able to buy a home. And it is not worth taking refuge in rent, because the evolution of its price and that of salaries is increasingly separated. This is a market in which we must act, in a very fast, clear and simple way. Without much BOE and without much noise: you have to build housingand if possible, social housing. Because we don’t have a problem of living, we have a problem of paying. In the video you can see the complete talk with Javier Ruiz.
Themes
#Mortgages #cheaper