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The rise in Euribor shifts the “boom” in demand from purchase to rental

Rent has become a collateral victim of rising interest rates. The increase in the cost of mortgages due to the rise in Euribor drove a large number of potential landlords out of the buying and selling market, who were carried over to rent, again putting pressure on rents in large cities. The opposite trend to what happened after the outbreak of the epidemic. Then there was the transition to selling. The richest tenants have embarked on home acquisitions in the face of incarceration and telecommuting. As a result, rental prices have shrunk and buying and selling prices have regained strength, in some cases approaching the real estate bubble numbers. Now it is rent that attracts all eyes. The Euribor index, indicated by 80% of mortgages, rose more than 2% in September, which, in addition to making the share of variable mortgages more expensive, has further complicated access to home ownership. In this context, kiosk rental is the only option available to thousands of families, driving up rental prices in large cities. According to Pisos.com numbers, rent increased 14.16% in Guipúzcoa, 12.58% in the Balearic Islands, and 11.83% in Barcelona during the third quarter. Related News Standard No Fixed, Variable or Mixed Mortgage: Which is the Best Option to Protect Yourself from Euribor? c. Guinness Bank Makes Fixed Loans More Expensive Due to Higher Reference Rate “The increase in interest rates that makes mortgages more expensive can act as an element of slowing home sales, while maintaining tension in the rent market,” says Tensa Studies Director, Christina Arias. , for this newspaper, especially in large cities, associated with the poles of economic activity. The appraiser also remembers that in a large number of cities home ownership prices have already been emphasized in relation to the disposable income of the citizens of those same locations. According to the Tinsa Effort Index, citizens in Barcelona and Madrid must allocate more than 40% of their income to paying the first installment of the average mortgage. Reasonable accessibility should by no means exceed 35%, they recall from Tinsa. “The transition from buying to renting is a trend that is already emerging in many cities,” adds Maria Matos, Fotocasa Studios Service Director. According to the real estate portal, 60% of home buyers have been affected by the price hike of Euribor. In addition, 24% of potential home buyers or applicants had to stop the process due to mortgage changes. According to this report, inflation affects homeowners (68%) more than those looking for a home to rent (53%). The basic problem is that the rental market is not ready to meet all this additional demand from the market for sales. ‘Stock’ for rental housing fell 37% during the second quarter and 25% during the third quarter compared to the 2021 data. With the outbreak of the pandemic, available supply has grown, partly due to a rebound in apartment tourism, but in it has fallen again in recent months . More information News Yes government rescues Zapatero-era legal report to take power at RTVE News No New UK finance minister overturns Truss budget plan News Yes stop paying squatter bills: ‘I already have 800 euros of water’ according to data from Idealista, during the quarter Third, the supply of apartments for rent decreased by 25%. In total, 41 out of 52 provincial capitals have reduced the supply of rental housing. The reduction was 52% in Alicante, 47% in Palma and 46% in Barcelona and Malaga. Valencia has 36% fewer apartments for rent, while in Madrid, Badajoz and Girona the drop is 33%. There is a shortage of social housing, Managing Director of Gesvalt Consulting, Sandra Daza, confirmed that “some banks are increasing their caution when granting mortgage loans, which is causing a boom in rent demand.” In any case, the real problem of the housing market for Daza is the aforementioned shortage of real estate, especially for vulnerable groups, both for rent and for sale. “It is a problem that remains unresolved despite the government’s investment announcements and it also has a complex solution,” he says.



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