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The Euribor imposes its law: fewer country houses after the pandemic and more ‘mini-flats’

Date: October 1, 2023 Time: 02:44:40

Being emancipated is more difficult every day in Spain. Young people trying to get out of their homes can’t find affordable rent, and the same is true for those looking for a new apartment to rent. As much as the agents in the sector try to find solutions, the fact that prices are through the roof and the Euribor continues to rise – above 4% -, has caused the decision of the Spaniards to become complicated, including accessing a mortgage. For this same reason, tenants are now focusing on new solutions and small flats or shared flats are the best option, when before, in the midst of the coronavirus pandemic, country houses and flats of more than 30 square meters were sought.

During the pandemic, many people began to look for more large, illuminated apartments that had special spaces for teleworking, among other characteristics that were maintained over time. Many even looked for rentals in rural houses, to spend the days; However, the situation has now changed and apartments between 30 and 45 square meters are the ones that attract the most attention, simply because they are the most accessible. Between the constant rise in rates by central banks, the global economy has been affected by rising prices. The same has happened with the reference index, which is around figures above 4%, putting loans to rent or buy a home in check.

From the Spanish Mortgage Association they have classified these monthly increases as an “unfavorable evolution” for the sector, presenting contractions of 8% in the granting of credits in what has been accumulated in the first months of the year. As a result of this, current prices have risen greatly, and accessing a rental is becoming increasingly difficult. The financing does not favor the situation either and for the same reason now they opt for the smaller apartments known as the ‘mini-flats’. According to the latest report by the National Institute of Statistics (INE) on Population and Housing Censuses 2021, it even indicates that interest in this type of housing has been on the rise and that Madrid leads the list of cities with the largest number of flats of 30 square meters.

Specifically, there were 44,945 mini-flats of 30 square meters registered in the capital, followed by Barcelona with 21,188 flats; Malaga (10,568); Balearic Islands (7,648) and Las Palmas (5,892). Between 30 and 40 square meters, the capital is also number one with 237,179 flats and Barcelona with 194,555. When launching this report, the INE assured that this is due to the increase in people looking for a single-person home: “It improves the living conditions of a person living alone and due to the aging of the population.” In addition to this solution, coliving, shared apartments and other housing methods have gained strength as one of the cheapest ways to live, so much so that the offer of renting a shared apartment shoots up 34% and its price rises. 3% due to the rejection that has been generated to the purchase of housing before the increase of the Euribor.

According to the latest data from the Idealista real estate portal, the greatest increase in supply was in Castellón de la Plana with 156%, followed by Almería with 98%, Alicante (81%), Lleida (77%), Albacete (68%) or Murcia (67%). In Barcelona, ​​for example, the increase has been 63% while in Madrid it remains at 10%. According to the same study, the profile of those looking for this type of shared flat is still largely young, but due to the rise in prices, the average age has risen to 34 years.

Housing Law, 23J… added to the Euribor

The benchmark index is not the only one that has affected. The economic situation of the country prior to the pandemic was found to be more stable, and youth emancipation, according to data from the Active Population Survey (EPA), was 28.87% of young people in 2018, and 20.65 in 2019. % ; however, with the pandemic the balance was destabilized and the figure dropped to 17.11% in 2020 and 16.75% in 2021. In this sense, this has been affected by different factors that have made young people look for other meetings to Rent a floor.

The Housing Law has also affected this situation of uncertainty. The legal insecurity that the regulations have caused by including articles such as limiting prices in stressed areas, or the definition of a large fork has marked a few months of tension in the sector. However, a few weeks after its approval, the situation was put in jeopardy with the results of the regional elections of 28M. Thus, after a long process of uncertainty, only one autonomous community has ruled on its application: Catalonia.

Although there is currently a political gap within the Catalan left in this area, the Generalitat continues to set the pace for the declaration of stressed areas, and limit the number of properties for large holders to continue standing. However, the agents of the ‘brick’ have assured that this will generate, like the rise in rates and the Euribor, more problems in the real estate environment and that “access to housing will be made impossible.” The Association of Promoters and Constructors of Buildings of Catalonia (APCE) and also the employers’ association Foment del Treball, have commented that this decision by the Government (to reduce the properties from ten to five to consider owners as large holders), will aggravate the problem access to housing.

Thus, “it will cause the withdrawal of rental apartments from the offer in order to go on sale, just the opposite effect to what is needed”, they settle, and add that “it increases the legal uncertainty” that currently exists. brought consequences, and the agents of the sector have shown their discontent and say that this new national scenario at the political level once again destabilizes the market and will affect, among other things, the purchase of homes. of interest rates by the ECB, leads the residential market to uncertainty. It is not good news from the real estate point of view”, says the deputy general manager of Donpiso, Emiliano Bermúdez.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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