Despite the recover, there are still problems with the Spanish housing market

By HopwoodHouse, 27 February, 2017

The Spanish property market is continuing to recover following the crash of 2007. House prices have increased by 10.4% over the last three years and 1.2 million homes have been sold with housing starts increasing to almost 67,000.

Despite this promising news, there is an access problem and so, a global housing policy is needed. The market has grown but it is still not accessible with demand for owning a property and renting property has caused prices to rise. Residential construction has also grown and housing starts in 2016, rose by 32% while the 150,000 starts seen in 2014-2016 were mainly in Madrid.

The increased prices of properties for sale in Spain have made it difficult for people trying to get on the property ladder resulting in the market pushing away young people, causing them to consider renting which pushes up rental prices. So, what does the rental market offer?

It was found that only 17.5% of households lived in a rental property in 2015 which shows that more rental properties are required.

Government policy is needed

The government need to know that there is a real issue surrounding access to the housing market. There is a need to create jobs and reduce the unemployment figure but the housing access problem should not be ignored. The number of dispossessed properties dropped in 2016 which the government are using as an easy route out as they believe that the housing problem is only related to the autonomous regions. Despite housing being transferred to the jurisdiction of the regions, there have been multiannual state housing plans since 1981.

There were seven programmes included in the last housing plan which ran from 2013 to 2016 of which one was linked to subsidies that made it possible for people to access the rental market. The subsidies consisted of up to 200 euros each month for those who had an income that was less than three times the Spanish IPREM index providing the rental costs were less than 600 euros each month.

There was one other programme that was rather intriguing and this was the one that was associated with the creation of a pool of homes available to rent. The idea behind the programmes was to provide subsidies for the creation of homes that had been constructed purely for the rental sector. The homes would be built on public land and would be aimed at those households with less than three times the IPREM index. However, for the first time the subsidy was removed.

In all honesty, the plan for 2013 to 2016 has been average but it will be continued for another year before a new plan is implemented or 2018 to 2020. The ideas are similar but the situation as it currently stands, needs an operational pool of homes to be created for rental in Spain. In Western Europe, Spain has the lowest number of rental properties for rent.