The Bank of Spain, in its annual report for 2022, stressed that access to housing for the Spanish population was and remains a "special vulnerability" for the market. The situation is even getting worse, due to general economic and non-economic circumstances. There are problems both in the segment of housing for purchase and for rent.
The central bank notes that the percentage of households in Spain who are homeowners has decreased significantly. Especially among young people. In 2011, the number of households with their own home was 83%. For persons under 35 years of age, this proportion represented 69%. According to data for 2020, this indicator has already decreased to 74% in general and specifically to 36% for young people. Wealth inequality is growing.
Real estate prices are rising, mortgage rates are also rising, while banks are providing money on increasingly stringent conditions. At the same time, the incomes of the population are falling, production in the economy is falling at the same time that there is general inflation. Without being able to afford to buy a home, demand has shifted to the rental market. And even there are problems in it today. So, in 2021, 48.9% of Spaniards living in rented housing were at risk of poverty, and 40.9% of them spent more than 40% of their total disposable income on real estate.
The boom in the rental market
According to Eurostat, 24.2% of the Spanish population lives in rented housing, which is lower than the EU average of 30.1%. About 800,000 Spanish households, or 2 million people, have switched to renting real estate over the past 10 years.
The report of the Bank of Spain indicates that the growth of the rental market is largely due to the dynamic demand from working youth in urban areas. They have the need to move to cities for earnings, which at the same time turn out to be quite modest. However, until recent years, the number of homeowners among this stratum of the population has been growing. From 2011 to 2021, the number of homeowners increased from 27.2% to 42%. The situation began to change only in the last year and a half.
Problems with access to housing will primarily affect such cities, the main urban areas that provide real estate for the working population. The problems will spill over to other sectors of the Spanish economy.
The volume of social real estate is not enough
The report of the Central Bank of Spain emphasized that the increase in rental prices occurs in conditions of a limited supply of affordable goods on the market and an extremely unsatisfactory number of social housing facilities subsidized by the state. The indicators of social housing, the bank points out, are noticeably below the European average.