Gonzalo Bernardos, a PhD in economics and university professor, has noted that the Spanish middle class is among the social groups most affected by the current economic crisis. Inflation has hit essentials hard, driving up prices for groceries, fuels, and energy sources, and squeezing household budgets across the country.
In a detailed briefing, the economist provided current insights reflecting the situation faced by the vast majority of Spanish families during sessions organized by the General Council of Official Real Estate Agents of Spain.
Buying a home is becoming increasingly difficult
The talks highlighted that a key trigger of the recession is a tightening of lending conditions. The European Central Bank has raised interest rates, which has reduced both mortgage applications and property purchases across Spain.
The UB professor pointed out that Spain is navigating a housing market downturn that depresses the purchasing power of residents. While tourism has supported GDP growth, overall economic improvement has remained elusive. The housing market outlook is seen as more dependent on credit availability than on employment trends. The rise in interest rates and banks’ reticence to grant mortgages have contributed to the current malaise, Bernardos observed.
The data tells the story
The number of mortgage loans fell by 17.03 percent in 2023. Last year saw 24,927 mortgages signed, compared with 30,042 in 2022 and 32,984 in 2021. The decline correlates with the rise in Euribor, which has increased the cost of financing these loans.
Bernardos anticipates that 2024 will bring another drop in applicants. The sector, affected by the current climate, shows a downward trend. He projects roughly a 15 percent decrease in housing transactions, even as prices remain stable.