Spain is a country of homeowners. Both because of tradition and culture, as well as the cost of property in relation to the average salary, this property market is characterised by focusing on owners. Even though renting has gained some popularity over the past years, the overall thought is ‘paying rent is throwing money down the drain.’
Rental prices in Spain’s big cities are clearly lofty if the average per capita income is taken into account. For this reason, many opt to sign a mortgage to become the sole owner of their property a few years down the line and not have to pay rent indefinitely.
In this sense, the Foundation for Applied Economic Studies (Fundación de Estudios de Economía Aplicada, FEDEA) warned in a recent report that falling homeownership in favour of renting could increase the inequality between household incomes in the coming years. From 2008 to 2018, years of recession and subsequent recovery, the average income for households owning their main residence exceeded between 30% and 45% the income of those families who lived in rented accommodation.
As shown in the aforementioned report, the form of tenure for main residences in Spain is chiefly homeownership with 80.8% during 2018 and an average 84.4% between 2008 and 2018 against 69.3% and 69.8% respectively in the European Union on a whole. Figures that confirm Spain is a country of property buyers and not tenants.
At this point, one thing is clear: tenure of a property, beyond being a place of residence, is a guarantee for anybody as life savings are made tangible by means of an asset the value of which, except for specific cases, will remain stable or on an upward trend. With these figure in hand, and despite an uncertain scenario due to inflation and rising interest rates, buying property has become a secure investment for many families.