45% of family income is used to pay the mortgage in Spain in 2023, according to OBS Business School

The report considers a State pact essential to give regulatory stability to the real estate sector.

45% of family income is used to pay the mortgage in Spain in 2023, according to OBS Business School

The report considers a State pact essential to give regulatory stability to the real estate sector


45% of the income of families in Spain is used to pay the mortgage, a level much higher than the average for the European Union (EU), and some 15 points more than what was used in 2021, according to the conclusions of a study on the OBS Business School on the real estate market.

The report, entitled 'The imbalances in the Spanish real estate market' and directed by the professor and director of Eurocofin, Carlos Balado, points out that this "vertiginous" rise in the cost of loans is the reason for the number of home sales this year is slowing down noticeably.

"Many choose to rent, which may put further upward pressure on prices," the report added.

On the other hand, the price of housing in Spain grows faster than wages, which is causing wealth inequality and the proportion of the population at risk of social exclusion to increase.

Since the rate hike began, prices have increased by 8% and are expected to increase by another 2% in the remainder of the year.

The study also highlights that some macroeconomic data have an unfavorable influence on the current situation of the real estate market, such as inflation, which "deteriorates the levels of savings necessary to face the home buying process." In fact, from the 14.8% savings in 2020 as a result of the confinement, it has gone down to the current 7.4%.

Also, the number of inhabitants has grown in the last year by 283,732, a figure that continues to grow and has a favorable impact on the creation of homes and the potential demand in the real estate market.

Likewise, the report points out that the fact that a good part of this growth is a consequence of the greater foreign population in Spain (255,191 people) supposes a more pronounced impact on the real estate market to the extent "that does not correspond to newborns who are inserted in the family nucleus, but to people who are looking for a work or rest destination".

The profile of the current buyer, analyzes the study, generally has a medium or high income and is a middle-aged person with pre-existing assets from a certain entity (real estate or financial), so often they do not finance with credit a high proportion of the cost of housing.

Another of the study's conclusions is that currently in Spain "there is a gap between low supply and high demand, especially at affordable prices."

The report indicates that if between 2020 and 2022 420,000 new homes were created in Spain, the number of homes started barely reached 300,000 due, on the one hand, to the high construction costs, the scarcity of developable land and the difficulties or delays to obtain building permits.

In May of this year, according to the latest available data collected by the report, 58,800 homes were purchased and sold in Spain, 11.4% less than in the same month last year. Sales only increased in Asturias (8%) and Murcia (1.3%).

It is expected that by the end of the year up to 480,000 operations have been carried out, a significantly lower number than in 2022, which stood at 650,000.

Today's homes are for an average of 2.51 people, a size that is expected to reach 2.41 people in 2035. And single-person homes will increase in the next 15 years, reaching 6.5 million homes in 2037 (29.8% of the total).

As for prices, in the first quarter of this year they increased by 6.3% and it is expected that in the remainder of 2023 they will rise another 2%. The square meter stood at 1,616 euros with an increase of 0.8%.

By autonomous community, the greatest increases occurred in Navarra, Cantabria and the Canary Islands, and only decreased in Extremadura, Castilla-La Mancha and Murcia.

The study also highlights that the granting of mortgage loans fell by 23.9%, to 25,754 operations (only 43.7% of them were financed in this way, which indicates that there are still savings from the time of the confinement that are used for the acquisition of housing).

The average mortgage in Spain stands at 145,000 euros and is paid with an average monthly outlay of 648 euros.

The report also points out that given the constant increase in rates, buyers are increasingly looking for fixed interest and this is already the alternative used in 66.92% of new mortgage loans.

The average contract period is 24 years and it is expected that the terms will be extended throughout 2023 as a way to counteract the impact of the rate rise.

Finally, the report concludes that there is a need to resume the construction of VPO (subsidized housing), encourage and facilitate the work of housing cooperatives with the transfer of land and help to promote protected buildings. In Spain there is a social housing park of 290,00 units that cover 1.6% of families.

This percentage places Spain in one of the last positions in the EU with a deficit when compared with the figures for the Netherlands, where the proportion of social housing reaches 30% of families, Austria (24%) or Denmark (20.9%).

Although initiatives have already been proposed to increase the investment effort in public sector housing with the aim of achieving a progressive increase in the public stock of social rental housing in the medium and long term, the OBS report considers it essential to implement collaboration policies public-private to be able to incorporate into the market affordable or appraised price housing that manages to balance the market.

The professor and director of the study, Carlos Balado, believes it is necessary "to resort to the formula of the State Pact, a long-term political commitment that provides regulatory stability to the real estate market, respects the rules of the free market and facilitates access to housing for all citizens regardless of ideologies".