Twelve years of full savings to cover the down payment and mortgage expenses

2023-12-26 04:15:06

The wall of previous savings is often the great barrier to access to home ownership for many Spaniards. A study by idealista calculates that to formalize a two-bedroom mortgage it is necessary, on average, to have more than 43,300 euros saved. A more than respectable amount and one that, for many families, is virtually impossible to achieve even throughout their entire lives. EY, in fact, has made another calculation that ensures that a Spanish household would need to allocate the entire savings accumulated over twelve years to have the necessary amount of money.

In its study “The Living Property Telescope”, the consultancy calculates that the gross savings rate of Spaniards is 12% of their income. Taking into account that the net income per household in Spain is 37,323 euros per year, the average savings per household would be 4,479 euros per year.

A home buyer must pay around 20% of the price of a home out of pocket because banks usually finance 80% through a mortgage to reduce the risks of non-payment and their default rates skyrocketing. This means that, assuming EY that the average house price is 265,000 euros, 53,000 euros would need to be saved to purchase a home of this type.

In general terms, EY concludes that, in most Spanish provinces, it is more affordable to live by renting than owning property. Only in some such as Barcelona, ​​Asturias, León, Cáceres, Ávila, Segovia, Córdoba and Tarragona is it indifferent to live in one or another property regime.

Obsolete and insufficient park

Regarding rent, the report ensures that public administrations (municipalities and regional governments) plan to launch different initiatives to build 78,000 affordable rental homes in collaboration with the private sector. For EY, this effort is insufficient, since it represents only 10% of the 800,000 that make up the total new housing supply expected until 2033.

EY hopes that both city councils and autonomous communities will continue to offer real estate developers new opportunities for public-private collaboration. However, after the last elections, no tangible measures have yet been finalized, adds the consulting firm.

The report adds that the housing panorama in Spain is dominated by antiquated and obsolete infrastructures that demand rehabilitation. With 40% fewer potential buyers, essentially people between 25 and 45 years old, the sector faces unprecedented challenges based on the inevitable reversal in the population pyramid since the “Baby Boom” generation, according to EY.

The consultancy has identified 508,000 homes in cities such as Madrid, Barcelona, ​​Valencia and Málaga, which would need to be repositioned to meet the demand of the next ten years and thus maximize their usefulness and profitability. This would be achieved, he adds, by adapting these spaces to shared structures under specialized temporary management schemes, a growing trend in the main cities of Spain.