·         20-11-24
Housing remains a crucial issue in Spain, and the outlook does not seem to improve much. Although interest rates have fallen, buying a home in 2025 will be more challenging. Here’s why.
Lower rates, but higher prices
This year, the Euribor and mortgages have given families a little respite, reducing monthly payments. However, housing prices continue to rise. According to API Research, in 2025 the reductions in mortgage payments will not compensate for this increase.
Insufficient supply versus high demand
The main problem remains the imbalance between housing supply and demand. In addition, family income has barely grown. This makes the possibility of buying increasingly difficult.
The housing affordability index (IAVP), which assesses whether a family can spend less than 30% of its income on paying for its home, predicts a significant drop. If this index falls below 100, it means that buying a home is not viable for most households.
The economic effort remains high
Although the time needed to buy a house has fallen slightly, families in Spain still need 7.1 years of salary on average, according to the Bank of Spain. In addition, the mortgage effort exceeds 30% of income from 2022, with no signs of improvement in the short term.
What will happen in the future?
A report by OBS Business School warns that, if more new homes are not built, the imbalance between supply and demand could worsen over the next 20 years. This would imply a sustained increase in prices.
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Conclusion
Although interest rates have fallen, high house prices and stagnant incomes complicate the outlook for those who want to buy in 2025. If you are thinking of buying a house, get well informed, compare options and evaluate whether it is the right time. Patience will be key in this process.
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