A summary of the main Spanish property news stories last week.
- Rental stocks declined 5% in Q1 to the lowest level since 2016, reports Spain’s biggest property portal, based on the number of rental listings in its database. Rental stocks declined the most in Malaga city and Palma de Mallorca.
- Mortgage financing was used in just 42.5% of sales in February down from around 50% the same time last year, according to the notaries. The average LTV was 71%.
- Euribor in March came in at 3.647 compared to -0.232 the same time last year. As a result the average €120,000 20-year annually-resetting loan would have seen monthly repayments increase by €223. You can see Euribor rates charted here.
- A new housing bill that introduces the possibility of rent-controls countrywide, and classifies small buy-to-let investors as ‘major landlords’ has restarted its passage through parliament this week, after 13-months stuck in political logjam. The bill will get fast tracked through parliament to pass before local elections in May, and the Mayoress of Barcelona has vowed to implement the new law before any other Spanish city. Read more about the housing-bill of 2023 and the impact it will have on the Spanish housing market.
- Spanish president Pedro Sánchez has announced that the Sareb ‘bad bank’ will provide 50,000 new affordable homes and EU will be used to help finance the construction or renovation of another 43,000, taking the total to 93,000. The government says it will provided 100,000 affordable homes by 2025, and 20% of the housing stock will be social housing in 20 years time, up from 3% today. “We are going to make housing a right and not a problem, because there is nothing more constitutional than the new housing law, and we’ll make housing the fifth pillar of the welfare state,” said Sánchez, not mentioning that private landlords are expected to foot a large part of the bill. Critics say the government’s plans are unrealistic, and mainly focused on short-term electioneering. For example, most of the Sareb’s properties are in areas with no demand, unfinished, in disrepair, vandalised, or occupied by squatters.
- The Supreme Court has agreed to consider the appeal by the regional governments of Madrid and Galicia against the new Solidarity Tax on Wealth that is particularly hard on foreign investors.
- The Catalan water crisis resulted in a new decree in March that places severe restrictions on water use in gardens, making it illegal to water lawns. The municipality of Begur has published new water regulations in English.
- The Foundation of Savings Banks (Funcas) forecasts that Euribor mortgage interest rates will rise to 4% and remain above that level until at least 2025.
