Monday, 2 september 2019 | Redacción CEU
The 2008 crisis was a blow to the Spanish economy. The real estate market was hit hard from which it is still recovering today. Despite this fact, the "brick culture" is today fundamental for the growth of this country, as evidenced by the progressive growth of the sector during the last years. Nonetheless, the rules of the game have changed. The approach is still conservative, but the market is slowly opening up to new options. On the other hand, principles such as "renting is wasting money" have started to lose their original strength in the Spanish society. All this has led many investors to wonder whether it is a good time to invest in a property in order to rent it out or not. Today, at the CEU IAM Blog, we analyze the keys to buying and renting a home as an investment.
2019 has been characterized by its moderate growth in the real estate sector. This progress has been marred by a drop of 16.2% in mortgage signings and 9% in the housing sales at the end of the first semester –according to the figures provided by the Spanish Statistical Office and the General Council of Notaries–. However, as the ABC newspaper points out, the IMF's growth forecasts (2.3%) may serve as an incentive for investors and individuals to acquire a property in 2019.
This is a detail that Casaktua.com experts have taken into account when presenting the trends that, in their opinion, will have an impact on the end of this year. Among them, we find some predictions which are related to the Spanish rental model:
- The rent "boom" will also affect peripheral neighborhoods
- Housing will continue attracting investors, profitability will remain positive
- Second-home owners will choose their own enjoyment to the detriment of the tourist rental
Likewise, the real estate website also notes the difficult access to housing for the younger generations, in particular, since their incomes do not grow.
Other studies such as that of BBVA Foundation and Ivie come to the conclusion that the percentage of people living in rental housing has grown in all autonomous communities in Spain, without exception. Specifically, an increase of four percentage points since 2007. This report also highlights the differences that exist between regions. For example, in the Canary Islands (27.8%), the percentage of rental homes almost triples that of Extremadura (10.9%). Paradoxically, this boom in renting (due to economic, sociodemographic, fiscal and cultural factors), coincides with a drop of 21% in the price of housing. Even so, the study indicates that the effort per inhabitant to acquire a home is still greater in Spain, which is why it is necessary to encourage rental housing.