Despite high interest rates, renting a house is not more profitable than buying it. This is clearly seen in the latest financial effort barometer by the iAhorro portal; This barometer shows that the rent payment currently represents 30.46% of the salary in the Valencian Community, while the mortgage represents only 20.56%. The lack of supply in the rental market causes prices to continue an unstoppable upward trend.
The study, conducted at a national level, concludes that Spaniards invest an average of 42.67 percent of their salary in paying rent (about €1,150 per month), while mortgage payments represent 25.94 percent of their income (€700). When we compare these data with the data obtained a year ago, we clearly see that: Efforts to pay rent increased by 0.78 percentage pointsThe amount incurred to pay off a mortgage is reduced by half a point. In the case of the Valencian Community, the efforts made by citizens are not so obvious. Even if, The average rental payment is 737 euros, in the case of a mortgage this amount drops to 497 euros..
Despite the rise in interest rates, Simone Colombelli, mortgage director at iAhorro, explains: There is a slight decrease in efforts to pay loans to buy a house. He confirms that the reason for this is “the increase in the average income of the household and the decrease in the amount of credit requested.” All of this, Colombelli adds, contrasts with rental prices, which “are rising due to supply shortages with no option to go cheaper, unless you’re renting a smaller home or in an area farther from the city centre.”
If the data is disaggregated by autonomous community, it turns out that there is no one for whom renting is more profitable than buying. Considering that the salary percentage is 48.68% on rentals and 46.56% on mortgages, only in the Balearic Islands do their residents need to make similar financial efforts.
In the remaining regions, there is a greater difference, even the difference between renting and purchasing reaches 21.45 percent. This inequality occurs in Catalonia; Here, residents spend an average of 47.30% of their salaries on rent and 25.84% on mortgage payments.. This is followed by the Canary Islands with a difference of 20.13 points (43.32% rent and 23.19% housing loan); Madrid with 14.27 points (31.29% vs. 45.56%); Andalusia with 13.78 points (40.33% compared to 26.55); and the Basque Country with 13.13 points (38.97% and 25.84%).
In the Valencian Community, the difference is 9.9 pointsCastilla-La Mancha is ahead of other regions such as Castilla y León and Extremadura, which do not exceed five percentage points between the two efforts.
Simone Colombelli underlines that the only solution to lower prices, both in rental and purchase, is to increase the supply of housing and emphasizes that this is “neither automatic nor fast, but essential.”
Source: Informacion
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