Housing is one of the problems that most concerns citizens. Prices have practically doubled in the last decade, while wages have increased only 16%. A part of the population, mainly young people, temporary employees and the unemployed, does not have access to it because their income is very low. It is a phenomenon common to all developed countries.
Real estate investment flows are growing by double digits and our country is one of the preferred destinations. The debate is in the street. The Tenants Union demonstrated over the weekend in large cities and threatened to stop paying rent. From Sumar, Yolanda Diazwants to temporarily prohibit speculative sales in stressed areas, arguing that it is a right included in the Constitution. An outrage that would curtail one of the fundamental freedoms.
In both the purchase and rental markets, the problem is that supply is much lower than demand. Between 1980 and 2010, three million more houses were built than new homes, but in recent decades the trend has changed. In Spain, about 90,000 are raised annually compared to a demand of 670,000, according to the Bank of Spain. The housing deficit until 2025 is estimated at 600,000 units.
If we look at rent, the situation is even worse. The great recession caused it to go from building 55,000 rental homes annually between 1990 and 2009 to 40,000 between 2010 and 2014 and to less than 8,000 currently, that is, one seventh. The vast majority are owned; there is no public rental housing stock, as in other European countries. In the last two years, only 2,300 were built, a minimum number.
He number of rentals increased by 3.3 million since 2007 to nine million, while the housing stock only grew by 1.3 million, in a context in which employment mobility increases rentals compared to ownership. 24.7% of Spaniards live in rent, with an increasing trend.
The demand for rentals has been fueled in part by second-hand housing, but lately phenomena such as temporary rentals or tourist apartments have appeared that reduce supply. Their success, as they are much more lucrative businesses than traditional rentals, is causing their social rejection and the adoption of regulations to restrict them.
The rental of housing is in the hands of private landlords, not large funds
In the case of seasonal rentals, between 1 and 11 months, there is an average increase of 50% in large areas. The Government failed to pass a proposal to reform the Urban Leases Law, which equated them to habitual residence and limited its application to six months at the initiative of the Tenants’ Union. Instead, it had to approve an emergency decree law that requires keeping a registry to exercise greater control over the owners of these properties.
The regulations extend to the rental of tourist apartments, which is also going like a rocket and has caused protests in large urban areas such as Madrid, Barcelona, the Balearic Islands, Valencia and Seville. In the latter, it is equivalent to 1.5 times that of residential.
Rentals are a way of survival for many families. The number of regular homes that become rented increased by one hundred thousand in the last decade. 90% of the market is in the hands of small landlords, contrary to the hoax spread by the Tenants Union, which claims that it is controlled by large investment funds.
Rents have risen between 7 and 10% annually in the last decade, while salaries have risen by 1.6%
As you can see, between the lack of new housing and the explosion of tourist and seasonal rentals that restrict supply, the average rental price rose between 7.5 and 10% annually between 2015 and 2022 while the average salary of young workers, one of their greatest demanders, increased only 16% during that same period.
In parallel, there has been a tightening of the credit conditions of the banks, which have gone from covering 80% of the value of the home to percentages slightly higher than 60%, to promote legal certainty and keep late payments at bay.
To the increase in housing prices Other factors have contributed, such as the increase in the cost of construction materials, the shortage of labor and the lack of final land and investment, which has gone from representing 11.7% before the great recession to 9%.
The result, both in renting and buying and selling housing, is that there is a mass of the population made up of young people, unemployed or temporary workers, who have been left out of the market because the gap between their income and the cost of The housing is unaffordable.
Spain is also the country with the most difficulties in Europe. 40% of tenants suffer from overexertion, that is, they allocate more than 40% of their income to paying rent, compared to the 26% average in the European Union.
How can it be resolved in the coming years? With patience, with a lot of patience, because the central, regional and local administrations intervene in the process. One of the obstacles is that the Government and the opposition have not yet agreed on the Land Law to prevent any lawsuit from paralyzing the works. Sometimes up to 20 years elapse between the granting of a license and the delivery of the keys. Express licenses would be required, as in the opening of small businesses in large cities, in which claims are resolved a posteriori.
The other problem is the lack of official housingwhich amounts to only about 300,000, equivalent to 1% of the rental housing stock. All the VPO that was tendered since the seventies was owned, so it is now in the hands of individuals. Of the 184,000 homes promised for the legislature, only 244 have been delivered, according to the Executive.
You can restrict the tourist homesput a stop to abuses in temporary rentals or tax the nearly four million empty homes. They are all patches that will not solve the problem in the short term. The reduction in rental costs of around 4% in Barcelona, which the left uses to defend the price cap, is still too early to evaluate the impact. Similar formulas tried in other European cities such as Vienna or Berlin have not worked.
The Bank of Spain recommends intervention limited to the most vulnerable (young people, the unemployed and temporary workers). Sánchez’s Government announced 200 million in aid to young people for the purchase of a home, just as Salvador Illa’s government has done in Catalonia with tax incentives. But capping rental prices in what are known as stressed areas or intervening in the market, as the left advises, will generate distrust between landlords and investors, which will restrict supply and make prices even more expensive. The good news is that the drop in the birth rate and the works begun to create entire neighborhoods on the outskirts of cities like Madrid will alleviate the rise in prices within a couple of years.
P.S..-Housing is not the biggest concern of the Executive at the moment, the worst problem is corruption. The UCO reports on the former minister abalos and the plot hatched by Aldama around masks and fraudulent fuels predicts unexpected surprises. In judicial and journalistic lies it is claimed that the Venezuelan vice president, Delcy Rodriguezlanded in Barajas with bags full of money with the funds withheld from Air Europa, which were distributed between the airline, the former organizational secretary of the PSOE and the Government’s political party. Of course, there is no proof of this at the moment. So everyone is waiting for new revelations about the Koldo case. If Sánchez did not know anything about all this, why did he so vehemently defend his former minister’s meeting with Delcy Rodríguez in Parliament?
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