The number of renters is increasing and the number of homeowners is decreasing (although they are still the vast majority). Is it a matter of choice or rather a lack of alternatives? Because all the indicators show the increasing difficulties faced by young people who want to buy a home.
One of the reasons holding back this access is that of not having sufficient savings to pay the initial down payment that leads to a mortgage.
In addition, recent interest rate increases have further slowed down the decision to buy a home.
Advantages and disadvantages of buying and renting
Social and cultural changes have had a considerable impact on buying and renting decisions. While in the past the priority was to buy, something typical of that solid time, the current times are more linked to a life without such strong roots as that given by a home ownership.
The most common changes of city of residence, as well as the possibility of enjoying different homes as a tenant, throughout a certain period of life or working career, are increasingly seen as an advantage.
It is also seen as a benefit that the owner of the apartment that is rented is who must pay for the renovations and maintenance costs of the property, while the tenant simply enjoys the property, subject, of course, to the payment of the corresponding monthly fee.
Renting offers more freedom and goes with the times, but in the long run, it means a greater disbursement than a mortgage, without having generated a patrimonial legacy after months or years of payment of these quotas.
Each case requires its own study, since the advantages of having an apartment that can be paid month by month comfortably are undoubted, but renting, as a temporary option, also satisfies some not inconsiderable punctual needs.
The boom of foreign investment in Spain
Another of the changes, both cultural and migratory, affecting the evolution of the Spanish real estate market has to do with the entry of foreign capital. But not of investments made from abroad, but on Spanish soil, with data that must be taken into consideration in order to understand the new scenario.
Thus, in the first half of 2022, sales and purchases made by foreign residents in Spain rose by 52.7%, according to data from the General Council of Notaries (Consejo General del Notariado).
A rise that is located in those regions with high tourist attraction, for use as a second home or as an investment for future sales or rentals. Who leads these movements? Andalucía and Comunidad Valenciana.
Growth of foreign investment in Madrid
The capital of Spain is one of the most benefited by this phenomenon, with Barrio de Salamanca as an area with special prominence and pull. The political tensions in the most unstable regions of Latin America, such as Mexico and Venezuela, are causing an outflow of citizens from those countries belonging to the most favored classes, and in many cases large fortunes, willing to acquire properties in this district.
According to data from the Association of Registrars (Colegio de Registradores), in the summer of 2022, foreign citizens bought 27,728 homes in Spain, almost 16% of the total number of transactions registered in that period, which is a record and consolidates the upward trend
Madrid continues to be the most important pole of attraction for investors in Spain, accounting for 64.7% of total foreign investment, which in the first nine months of 2022 amounted to almost 15,000 million euros.
Interest in historic neighborhoods and luxury assets
Among the destination of these investments, as already mentioned, is the real estate sector, with an eye on the high-end market in neighborhoods with high purchasing power and historic buildings. At a time when real estate transactions by foreign investors have doubled, Madrid and its Barrio de Salamanca face the challenge of offering homes, both for rentals and sales, that have the quality and characteristics to meet the demands of their future inhabitants.
That is why it is essential to have a comprehensive, efficient and specialized real estate advisory service in the area. Advice from the hand of David de Gea.