Fear of a new housing bubble with purchase and rental prices on the rise
The fear of a new real estate bubble is flying over again among Spanish citizens. The perception that this situation could be repeated has risen to 6.1 points out of 10 in the month of September, compared to the 5.7 registered in February . This is evident in the report Radiography of the housing market in the second half of 2021 prepared by Fotocasa, which explains that since the pandemic broke out, the perception of such a scenario had moderated.
53% of individuals point to rental prices as the main reason for the September increase, while another 48% refer to purchase prices. “With the arrival of the pandemic, many Spaniards expected that prices, especially purchase prices, would drop drastically and this is not happening. We are not seeing large increases either, but prices are maintaining close to a 2% increase, ” explains María Matos, Director of Studies and Spokesperson for Fotocasa.
The expert adds that the fact that prices are not falling with the expected force may be one of the reasons that lead Spaniards to think that we are close to a real estate bubble. However, it makes it clear that the portal does not believe that we are facing a new real estate bubble.
” We do not think that there is a danger of being close to it right now . First, because prices are not rising exorbitantly and right now the average price of second-hand housing is almost -40% below the years second, is that, although banks are giving mortgages and keeping the credit tap open, they are being much more cautious and restrained than in the past. Financing does not exceed 90% of the total mortgaged in any case and they are looking for profiles with certain solvency “, adds Matos.
Feeling of ownership
The Fotocasa report also confirms that the feeling of ownership remains deeply rooted in Spain. Specifically, 9 out of 10 individuals of legal age active in the housing market positively or neutrally view the idea that the feeling of ownership remains deeply rooted in the mentality of Spaniards . Their degree of agreement on this idea is, on average, 7.6 points out of 10.
The text adds that with “this good predisposition towards home ownership, it is logical that they are also favorable (7.2 points) to the idea that the rental price makes it worth paying more for a mortgage.” This favorable framework for buying and selling is even consolidated when they are asked if the market trend is to rent more and buy less: six months ago, 45% were in favor of this idea and now they are 37% .
On the contrary, although in a slight way, the trend of the arguments that support the image of housing in terms of assets has changed direction and has begun to decline . Thus, the consideration of the purchase of a house as a good investment raised a support of 7.1 points in February and in August it has fallen to 6.9 integers.