26 April 2016 – El Economista
The real estate boom at the beginning of this century caused the housing stock in Spain to increase by almost three million. Most of those homes were acquired as main residences, but the majority have not been paid for yet (they still have outstanding mortgages). That is according to Spain’s National Institute of Statistics (INE), which estimates that 2.974 million homes were constructed between 2001 and 2010. Of those, 1.85 million (62%) still have mortgages pending payment.
Another 562,000 homes constructed in the last decade have also been sold and they have already been paid for, either because they were paid for in cash at the time, have been inherited or because their mortgages have already been paid off. Another almost half a million (482,000) are rented out as main residences and another 79,000 are transferred or low cost homes.
This data corroborates the fact that Spain is still a country of “owners”. In 2015, 77.3% of households lived in homes that they owned, both with mortgages and without, a percentage that was slightly lower than the 78% seen in 2014. By contrast, the number of households that rent their homes increased from 16.6% of the total in 2014 to 17.5% in 2015.
According to INE, although in the case of homes constructed within the last decade, the proportion is much higher, 28% of households live in homes with mortgages, whilst 48.9% of homes have already been paid for.
Only 91,900 homes were built between 2011 and 2015
INE’s data also reflects the slowdown that the property sector has suffered since 2010. Whilst 1.275 million homes were constructed between 2006 and 2010, during the next five year period (2011-2015), that figure was 14 times lower: 91,900. This shows the decline that the property sector has suffered since the burst of the real estate bubble.
The same phenomenon can also be seen in the number of mortgages signed, which, despite the progress made in 2015, still falls a long way belong the level seen during the bubble. Specifically, in 2015, loans amounting to €25,934 million were signed to buy homes, which represented an increase of 24% with respect to 2014. But that figure falls well short of those recorded in 2006 and 2007, when loans worth €180,000 million were granted. In other words, the house loans signed last year had a combined value that was 7.5 times lower than during the years of the boom.
In addition, INE has identified that housing tenure regimes varies by nationality. In this way, 59.7% of households with at least one foreign member rent their homes, compared with 12% of households in which all of the household members are Spanish.
Original story: El Economista (by Inés Calderón)
Translation: Carmel Drake