Despite lower prices for prime property that make Spain look like a bargain compared to other European countries, local buyers with low savings and restricted access to financing have been forced to reduce their expectations when it comes to buying a home, explains a recent article in the Spanish daily El Mundo.
Adaptation and translation of an article published by El Mundo.
Seven years after the start of the economic crisis, the fall in purchasing power has meant that Spaniards have changed their priorities when looking buying a property. Potential buyers have adjusted their budgets, and because of this, are increasingly choosing smaller and cheaper properties, with fewer communal facilities, located in worse areas.
This is one of the main conclusions reached in a report published by the property portal Casaktua.com. According to this study, compiled from 1,100 interviews conducted throughout Spain, eight of every ten interviewed said they were looking for cheaper properties, and only 28 per cent of them were prepared to pay between €50,000 and €100,000 – the cost of an average property. Price is, therefore, still the main obstacle for potential buyers, and four out of every ten interviewees claim it’s difficult for them to find a property they can afford.
The big outlay in taxes and other fees, the sensation that the price adjustment has not finished, and uncertainty over being able to get a mortgage, are the other reasons that put Spaniards off buying their own home today. The perception that the crisis has influenced buying decisions is confirmed in 94 per cent of those interviewed.
STUDIO FLATS ON THE RISE
Regarding type of property, flats are still the most sought after among Spaniards. Seven out of every ten live in one. However, studio apartments (a flat with one bedroom only) are becoming more attractive, and although only 5 per cent currently live in them, demand has tripled to reach 18 per cent. The people most interested in moving to a studio flat are singles, and people who share.
In the property market, size matters. Above all, if it’s linked to the price, and because of this, more than half of those interviewed say that they’re looking for smaller properties. In addition, 41 per cent are prepared to give up some communal amenities such as gardens, swimming pool or leisure areas.
Location is another key factor that the Spanish bear in mind when looking for a property. Three out of ten settle for a less good area in order to stay in budget. Other characteristics such as natural light, public transport, or easy parking – street or own parking space – are fundamental for those interviewed when choosing one property over another.
“The type of property we sell now has changed considerably since before the crisis,” explains the Casaktua.com sales director, Chus de Miguel, saying that “people buy where they feel comfortable socially”. Social ties are more important that prime locations. “No one goes to live in a place just because they can afford it, they look for other things such as being close to family,” he adds.
In this sense, De Miguel emphasises that over the last few years “many people have bought properties in the towns and villages their family came from because prices are very good and if people have the money and the opportunity to be near their families, they buy”. This explains why six of every ten holiday homes are in inland areas.
RENTALS RISE, SALES FALL
As was inevitable, the effects of the crisis on Spaniards’ pockets have directly affected demand, and at the moment, only 42 per cent are considering moving home in the short or medium term. In addition, half of those interviewed do not own a second home, nor do they intend to buy one.
23 per cent choose to rent over 77 per cent who own their home. The current economic situation has led more people to choose rental over purchase. At the moment, 23 per cent of those interviewed rent, against 77 per cent who own their home. Since the crisis started, the percentage of people choosing to rent instead of buying has go up six-fold, from 6.4 to 40 per cent.
As is the case with purchases, tenants do not have high budgets. Six out of every ten can afford a maximum of €400 rent a month, while 2.6 per cent could pay more than €1,000, and 4.4 per cent could not pay more than €150.
On the other hand, it’s worth pointing out that the increase in the number of people renting is not due to a change in mentality, but to necessity. 70 per cent of those interviewed admit that they are renting because they have no choice, which shows that the trend towards rentals is due to economic circumstances.
Spanish Property Insight adapts and translates selected articles from the local press for the benefit of non-Spanish speakers.
This translation is based on the following article (in Spanish): El comprador que deja la crisis busca casas más pequeñas, más baratas y ubicadas en peores zonas