August 3, 2021

What does buying a house mean now? Higher mortgages and less disposable income | Economy

What does buying a house mean now? Higher mortgages and less disposable income | Economy

Stagnant salaries and price of housing in continuous escalation. The equation has a bad resolution for citizens who want to buy a house: ask for bigger mortgages and therefore dedicate more of their income to pay them. It is the main conclusion of a survey that was conducted last May among visitors to the Real Estate Exhibition of Madrid (SIMA) and whose results have now been presented.

According to the study, based on 568 interviews, most respondents (45.2%) indicated that they would need to finance between 50 and 80% of the floor value through a mortgage, which means an increase of almost six points to the results of 2017. In addition, 24.5% indicated that they would need to cover more than 80% (0.1% more than the previous year).

In the case of the youngest segment of the population, between 25 and 35 years old, almost 9 out of 10 respondents indicated that they would need to finance more than half of the housing. Although in this segment those who claimed to require more than 80% of mortgage descended (36.6% versus 38.1% in 2017), there was a large increase in those who would need between half and four fifths to 54.4 % of respondents, nine points more than the previous year.

As a result, the data was reflected in the following question, relative to the level of family income that would need to devote to the payment of the mortgage. If in 2017 44.8% of respondents said they require less than 30% of their income, this year the percentage dropped to 36.1%. At the other extreme, those who claimed to need more than half of their income to pay for housing were 8% (2.3 points more than the previous year). And when breaking down the study by age, young people again appear as the most vulnerable segment: only 31.1% of those interviewed said they required less than 30% of the income to pay the mortgage.

"What we are hearing is part of a micromarket that is the Madrid one and could be applied to Barcelona, ​​but it can not be extrapolated to other provinces," said Juan Fernández-Aceytuno, CEO of the Appraisal Society, during the presentation of the report. The profile of the home buyer 2018. The fourth edition of the study has focused especially on the difficulties of those under 35 years of age to access housing. In that sense, Fernández-Aceytuno has estimated that "the salary part conditions the young people a lot and the rent prevents them from saving: either they have an important family support or it is practically impossible to buy".

For Eloy Bohúa, general director of Planner Exhibitions (the organizing company of SIMA and co-responsible for the survey), the data indicate that "we would be placing ourselves at levels not too sustainable" in terms of the level of income necessary to pay a mortgage. Although he has highlighted that the study also reflects a greater optimism among those who hope to buy a house soon because "the increase in prices is accompanied by greater access to financing."

Among the rest of the analyzed variables, the experts also notice a drop in the youngest demand (the percentage of visitors younger than 35 years to SIMA has fallen in the last years to a third when in previous editions they were almost half) while the potential buyers increasingly dilate the period until they find a house. In this sense, 41.8% of the respondents indicated that they had been looking for a house for more than six months and less than two years, seven points more than in 2017.

Another important conclusion, says the report, is that "the purchase budget does not grow at the same pace as prices." The survey divided the 568 participants into three sections: those who say they have a budget of less than 150,000 euros, those that exceed 300,000 euros and those that fall between these two figures. With respect to 2017, the percentages hardly changed, although housing in Madrid (and also in Barcelona) grew at annual rates of around 10%.


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