·        21-11-24
Housing remains one of the biggest challenges for families in Spain. Although the drop in interest rates promised to facilitate access to the real estate market, the outlook for 2025 is not as encouraging as expected. The combination of rising prices and stagnant family incomes is complicating the dream of accessing one’s own home.
Why does the drop in rates not improve access to housing?
According to the API Research Real Estate Observatory report, the drop in rates during 2024 generated a temporary relief in access to housing. However, in 2025 this benefit will be offset by the sustained increase in property prices.
Key points of the report:
1. Increase in the accessibility index: The index of accessibility to home ownership (IAVP) shows a worrying drop. This indicator measures whether family income is sufficient to cover mortgage expenses. A value below 100 indicates that the economic effort exceeds 30% of income, the maximum recommended limit.
2. Evolution of the IAVP:
o In 2024 it improved slightly due to the drop in the Euribor.
o In 2025, the increase in housing prices and the stagnation in the growth of family income will reverse this progress.
3. Impact on families:
o Currently, approximately 7.1 years of salary are needed to acquire a home. Although this figure represents a slight improvement compared to 7.4 years in 2023, it is still far from sustainable levels.
o The economic effort for Spanish families exceeds 36% of annual gross income.
Supply and demand, a market in imbalance
The structural mismatch between the supply of available housing and the growing demand is the main driver of high prices. This imbalance exerts constant pressure on the real estate market.
• Although the Euribor fell from mid-2024, the positive impact on access to housing is minimal due to insufficient growth in household income.
• The lack of adequate supply in the market limits the possibility of a fall in prices in the medium and long term.
What does the future hold for the real estate market?
OBS Business School experts highlight that, if the construction of new homes is not significantly increased, the structural imbalance between supply and demand could worsen over the next two decades. This makes access to housing even more difficult for future generations.
Key perspectives:
• Rising prices: A significant fall in prices is not expected in the short or long term.
• Insufficient construction: The supply of new homes remains limited, worsening the market situation.
Conclusion: A continuing challenge for 2025
Access to housing in Spain remains a considerable challenge. Although the interest rate cut in 2024 helped to temporarily ease mortgage payments, the combination of rising prices, limited household income growth and a lack of adequate supply presents a bleak outlook for 2025. The real estate market needs structural reforms to break this loop and offer sustainable long-term solutions.