Buying a house to own is one of the goals of many young people, a goal that is truncated in the current scenario of the real estate market, with the rise in interest rates and instability. Although economic barriers are the main reason, There are other factors that prevent young people from accessing their own home.
In fact, the latest Family Financial Survey, published by the Bank of Spain, reveals that, in 2020, only 36% of those under 35 years of age They owned their main home. A figure that contrasts with that recorded almost 10 years earlier, which was 69.3%. This data reveals a clear downward trend in the acquisition of residential properties by this group.
That is why the experts at Solvia, a leading firm in real estate servicesidentify the main difficulties that young people face when purchasing a home.
Prices increase 3.1% year-on-year
Although the real estate sector is entering a phase of stabilization of its metrics, housing prices have continued to increase. As shown by the College of Registrars, in the second quarter of the year, the cost of residential real estate grew by 3.1% Compared to the same period of the previous year. Solvia’s forecast is that these will continue to increase, with increases that will be between 1.5% and 2.5% at the end of the year.
Spain has the highest unemployment rate in the European Union (27%)
According to figures provided by Eurostat, Spain closed the month of July with a total of 2,779,000 unemployed people and, of the total number of registered unemployed, 461,000 were under 25 years of age. In this sense, our country presents a youth unemployment rate of 27%, the highest of all countries members of the European Union. On the other hand, those who do have jobs also face job instability, with a high rate of temporary employment and low salaries. All of this can cause problems when accessing housing, since it would cause them to have difficulties saving, in addition to being considered higher risk borrowers by financial institutions.
Interest rates and the Euribor at historic highs
In recent months, we have witnessed the rise in the cost of bank loans, another barrier to access to home ownership for the youngest: the European Central Bank has announced that there will probably be new increases in interest rates, which already exceeds 4%. For its part, the Euribor closed August at 4.073%.
Furthermore, in its latest survey of bank loans, the Bank of Spain states that granting criteria were tightened during the first quarter of 2023, for the fourth consecutive period. In this sense, demand would have decreased, particularly sharply in loans to families for the purchase of housing. Young people are also one of the sectors most affected by this tightening of requirements since, usually, the lack of credit history, their lower savings capacity or lack of income stable It greatly hinders access to financing.
Lack of financial education
The lack of experience and knowledge about the process of searching for your home and the financial and legal procedures involved would be another of the challenges that this group faces. The lack of guidance and education on these issues can hinder your ability to make informed decisions and navigate the complex housing access system.
Financial education is essential to understand concepts such as budget planning, saving, debt management, the types of loans and financing options available. Without a solid understanding of these topics, you may face difficulties in your ability to save for a down payment on a home, evaluate mortgage loan options, or understand the long-term financial implications.
Young people give more importance to other aspects
Young people today tend to value flexibility and mobility more in their lives. The idea of settling in one place through the purchase of a home is no longer an absolute priority. They prefer to have the freedom to change locations based on job opportunitiespersonal connections or lifestyle preferences.
On the other hand, according to the latest edition of the report ‘Sustainability in housing in Spain’, carried out jointly by Solvia and Fotocasa, only 4% of people looking for a home sustainability is not considered important. This change of mentality in society generally implies an increase in price: opting for second-hand properties would reduce the possibilities of having a sustainable home, since these properties are not usually adapted to the latest regulations on energy and health. sustainability. This would mean either facing the necessary renovation or choosing a new or recently renovated home.