Spaniards are better off buying a home than renting given current house prices and mortgage rates, claims Eduardo Molet, a real estate expert often quoted in the Spanish press.
Molet, who founded the Network of Property Experts (Red de Expertos Inmobiliarios), and advises Spanish banks and foreign funds investing in Spain, says that buying is now “more attractive than renting, even with a fixed rate mortgage,” given that the typical monthly Spanish mortgage repayment on a loan of €100,000 is now around 350 to 400 euro per month.
Someone renting a typical property of similar characteristics would be paying around 500 euro per month in rent, he claims.
MINI-BUBBLE IN THE MAKING?
Given the current low level of house prices and mortgage interest rates in Spain, Molet forecasts that prices will rise faster in some hot segments like city centre and popular coastal areas. “In no case will it reach the level of the boom years,” he says, quoted in the Spanish press, “but the possibility exists that in the big cities and coastal areas prices will rise at a faster rate than other parts of Spain. We are already seeing this in Barcelona and Madrid.”
As a result, he forecasts there could be a “mini real estate bubble” in the coming months in some parts of Spain, as low prices and cheap mortgage loans join forces with rising demand to drive up prices.