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PROPERTY

New mortgages in Spain cost six percent more than in 2021

Mortgage loans in Spain increased by six percent in 2022, meaning that Spaniards are now paying an average of 30 percent of their salaries on payments.

Published: 27 March 2023 11:17 CEST
New mortgages in Spain cost six percent more than in 2021
New mortgage payments increase by six percent in Spain. Photo: Dovile Ramoskaite / Unsplash

According to the latest data from the Real Estate Registry Statistics yearbook of the College of Registrars, the average mortgage payments from new loans have risen by 5.8 percent in the last year, to stand at €646.7, the highest annual average since 2009, in which the average bill amounted to €671.

This figure means that Spaniards are now having to pay just over 30 percent of their average gross salary on mortgage bills, a threshold that is far exceeded in Madrid and the Balearic Islands. 

Large differences have been seen in the amount of the increase between each region in Spain, although an upward trend has been noted in all of them. The largest annual increases in mortgage payments have been registered in the Balearic Islands (20.1 percent), La Rioja (14.6 percent), Madrid (8 percent) and Extremadura (7.4 percent).

Those in the Balearic Islands also pay the largest monthly payments for new mortgages, which reaches €1,097.9, €450 above the national average. This is followed by Madrid (€959.1), Catalonia (€727.8) and the Basque Country (€679.3), which are the only regions that exceed the national average.  

READ ALSO: What happens if you can’t pay your mortgage in Spain?

On the other hand, at the opposite end of the scale, Murcia (€418.1), Castilla-La Mancha (€462.2) and Castilla y León (€476) are the areas where the monthly payments are the lowest.

According to the Association of Registrars, the increase in the cost of new mortgages is due both to the increase in the average amount of loans signed throughout 2022 and to the shortening of the average contract, which fell by 0.7 percent to 24.4 years, as well as the rise in the Euribor. 

Last year the real estate market reached figures not seen in the last twelve years with a total of 463,463 mortgage loans given out, 11.6 percent more than the previous year. The average amount of these loans rose by 4.7 percent to €145,190, the highest amount recorded since mid-2008.  

Not only has the price of housing risen – property became more expensive on average in 2022 by 6.7 percent to €1,944 per square metre – but interest rates have also grown intensely.

The Real Estate Registry Statistics show that the average contracting interest rate in 2022 stood at 2.28 percent – 2.40 percent for fixed mortgages and 2.03 percent for variable ones.

The average salary has also increased, but not to the same extent as mortgages, so the effort required to purchase a home has risen by three-tenths. The latest data shows that the average mortgage payment represents 30.95 percent of the average salary in Spain, although the differences are again significant between regions.  

The Balearic Islands is the region where Spaniards have the greatest difficulty in accessing a mortgage as the monthly re-payments represent an average of 56.49 percent of the average gross salary. In Madrid, it’s 38.19 percent of the average salary, while in Catalonia it’s 32.22 percent.  

At the bottom end are Murcia where 22.69 percent of salaries go on mortgages, Asturias with 23.71 percent and Extremadura with 23.87 percent.   

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TOURISM

Spain urges regions to limit Airbnb-style lets in ‘stressed rental areas’

Spain’s Housing Minister has called on the 17 regional governments to implement restrictions on short-term holiday lets in areas where rents for locals have spiked, as the national government continues to look for ways to address the country’s housing crisis. 

Published: 12 April 2024 09:30 CEST
Spain urges regions to limit Airbnb-style lets in 'stressed rental areas'

Spain’s Housing and Urban Agenda Minister Isabel Rodríguez on Thursday said short-term holiday rentals “have to be limited” to guarantee access to housing to residents.

“Wherever there is a greater concentration of apartments for tourists, there is also pressure in the property market ,” Rodríguez told journalists at a press conference, adding that measures had to be implemented “with military precision” to ensure that Spaniards don’t spend more than 30 percent of their wages on rent or a mortgage.

For this, she called on all regional and municipal governments to make use of their executive powers to limit holiday lets in cities, towns and neighbourhoods where property prices are out of control.

“Stressed property markets” (zonas tensionadas), as described by the Spanish government, are those where residents spend more than a third of their monthly earnings on housing.

So far, Catalonia is the only region to declare its property and rental market “stressed”, giving them greater control over how much landlords can charge for rent.

Varying legislation restricting Airbnb-style rentals has already been introduced in recent years in numerous cities such as Valencia, Palma, Seville, Tarifa, Madrid, Barcelona, and San Sebastián, with varying degrees of success. 

But despite there being rules and regulations for this relatively new form of holiday accommodation, it hasn’t been enough to prevent places like Málaga city centre from having a higher ratio of tourists ‘living there’ than locals.

READ MORE: ‘Get the f*ck out of here’ – Málaga plastered with anti-tourism stickers

Asturias and the Canary Islands are two of the autonomous communities which are currently preparing to roll out restrictions on a regional level. 

READ MORE: How Spain’s Asturias region plans to limit short-term holiday lets

“I want to meet with the autonomous governments to discuss this matter with the Industry Minister, I do not want to encroach on their powers, but it is my concern as they’re (holiday lets) putting pressure on the residential market” Rodríguez stated.

Her words came after a meeting with the Spanish Cabinet which included Prime Minister Pedro Sánchez, Economy Minister Carlos Cuerpo and various representatives of Spain’s real estate market.

Spain’s increasing living and housing costs – coupled with a rise in tourists, digital nomads and other ‘affluent’ foreigners who seem unaffected by higher expenses – is causing unease among Spaniards who feel their quality of life is worsening. 

It’s unclear whether Spain’s national government is simply passing the buck to the regions over the gargantuan task of fixing the country’s housing crisis, but Madrid did decide to scrap the country’s golden visa scheme which granted residency to wealthy non-EU nationals who purchased a Spanish property worth €500,000.

Spain’s Housing Minister said they have to be “more agile” when dealing with “these emergencies” and “prioritise” residential housing. 

However, Spain currently lags behind the rest of EU when it comes to state-controlled social housing making up just 2.5 percent of the total, while in countries such as the Netherlands (30 percent), Austria (24 percent) and Denmark (20.9 percent) it is ten times that or more.

In fact, even with the Socialist government’s promise of providing 184,000 affordable housing units for rent, the number of legally registered holiday lets in Spain is far higher than that: 340,000.

READ ALSO: Why does hatred of tourists in Spain appear to be on the rise?

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