The acute lack of housing that Spain suffers is driving up prices, which are growing even more than inflation, and there are no signs of the situation improving. This is clear from a study published today by the appraisal company UVE Valaciones, which predicts that during the next four years – at least – real estate inflation will continue to rise above the CPI.
The increase has been constant since 2014, the year in which the ‘truce’ that followed the real estate ‘crash’ after the 2008 crisis ended, and has already reached 89% of the historical maximum recorded in the first quarter of 2008. In fact, In July, new construction broke a record -2,930 euros per square meter- by exceeding 2007 prices for the first time.
Even so, UVE Valuations adds an important nuance, and that is that if the evolution of prices is analyzed in constant euros (adjusted for inflation), they are still far from the highs of 2008 in most provinces. The news is good and bad at the same time, because it means that prices still have a way to go.
Everything indicates that the latter is very true, because despite the reduction in mortgage payments due to the reduction in interest rates –twice this year, until leaving the reference rate at 3.25%-, which has encouraged purchases, and the increase in employment and salaries, the supply does not keep up with the same pace.
The data obtained from real estate portals reflect a decrease in the supply of used homes, while the number of new homes entering the market is insufficient and covers less than half of the needs of new families.
Spain needs 300,000 new homes in one year
That is what is central to this problem. According to the appraisal company’s analysis, it would be necessary to build 300,000 homes per year to meet demand, compared to the approximately 110,000 that are currently built annually.
Exactly, the Bank of Spain estimates at 500,000 new homes that are needed to adjust supply and demand (as ABC already explained, revising downwards with respect to the 600,000 that it forecast until now).
UVE Valaciones anticipates that meeting this objective will require a significant expansion in the capacity of the construction sector, the training of new workers and the development of the housing prefabrication industry; solutions that they estimate would take at least two to three years to implement.
The truth is that many Spaniards do not have that much time. According to the study ‘Relationship of salaries and rental housing in 2023’ prepared by InfoJobs and Fotocasa, middle spanish dedicates 43% of your gross salary to paying renta record figure that far exceeds the 30% recommended by experts.
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