On the move: Who's looking to buy a home, and who isn't

A TYPICAL homebuyer based in Spain at the moment is female, aged 40, and living with a partner and children, according to recent research.

Now that the pandemic is in its ninth month, estate agencies have collectively said more and more buyers are choosing to wait to 'see what happens', or because they are concerned another lockdown might affect their jobs – in fact, 88% have shelved their plans.

But 21% say they intend to buy a property in the next five years – either their first, or to move house.

Not much has changed in terms of the typical profile of a person already living in Spain and seeking to buy a home since before the pandemic – just over half are female, about half of those with the desire to purchase are aged between 25 and 34, but among those who are expected to actually do so, the average age is 40, and normally from a middle-class background and of mid-range earnings.

 

Most potential buyers are in Andalucía, Catalunya and Madrid

The regions with the most Spanish residents very seriously considering a purchase, either within the same area or somewhere else altogether, are Andalucía (20%), Catalunya and Madrid (16% each).

Nationwide research by well-known property sales firms has shown the main reasons why those who have opted not to buy at the moment, and the figures are very similar for each to before the days of Covid-19.

About a third say their job situation or income is not conducive to home-buying, and another third say they do not have enough in savings for the deposit and fees, which can be difficult for those not looking to sell a property first, such as those thinking of purchasing a second or subsequent home, or first-time buyers, as mortgages are typically capped at 80% of the price or value, whichever is lower, for a main residence and 60% for an additional property, such as a holiday home or a buy-to-let.

However, a few lenders are still offering 100% mortgages.

A quarter say they have 'other priorities or expenses at the moment', and 22% say they already own a home and are 'not in a hurry to move' right now.

About three in 10 say current property prices are beyond their budget, or that they are currently 'very high' and they prefer to wait to see if they 'slow down in a few years'.

This, of course, depends very much on the area; big cities, for example, have some of the highest home values in the country, but for those willing and able to commute, or who are now working from home – meaning where they live does not affect their jobs – properties out in the provinces, even on the coasts, can be a serious bargain.

The 8% who say they currently live in a town or city other than the one they would like to buy in, and cannot move house for the moment, and the 4% who say they cannot get the mortgage they need or even a mortgage at all, remain unchanged from before the Coronavirus crisis.

 

Rise in demand for rental

Of those who have ruled out buying at the moment, only 27% still live with their parents, which suggests that a high percentage of young adults are keen to have their own space one day.

Of the 71% of adults living in Spain who have no intention of buying, around 26% live with a partner or spouse, 37% live with a partner or spouse and their children, but only 16% are still living with their parents.

The typical profile of a person who is not looking to buy a property in the foreseeable or even long-term future is male (52%), middle-class, and aged 48.

As well as those who already own a home and are not planning to move, they include residents who prefer to rent, or are currently renting, due to a perceived sense of freedom from responsibility.

Before the pandemic, and now, 3% say renting means they do not have to worry about property maintenance costs, but the number who believe renting gives them 'greater freedom and flexibility' has risen from 9% to 14% and those who say home ownership rather than being a tenant 'does not fit in with their lifestyle' have risen from 8% to 10%.

Fewer, though, since the start of the Coronavirus crisis, are saying property purchase prices are beyond their budget (down from 19% to 18%), or that they do not want to spend the bulk of their savings on a deposit or income on a mortgage (down from 13% to 12%).

Rental prices may have gone down across the board, depending upon how one interprets the figures: Before the pandemic, 3% said that by renting, they can afford to live somewhere they would not be able to afford to buy, and this has increased in 2020 to 4%.

This said, with the Eurozone interest rate – the Euribor, upon which the majority of Spanish mortgages are based – having been in negative since February 2016 and, seemingly, constantly, if not consecutively, falling, home loans in Spain have long been very cheap and getting cheaper.

There is little room for the Euribor to fall much further, so future monthly savings are now tending to be mere small change, but it seems very unlikely the rate will rise in the foreseeable future and, when it has done in the past, this has always been gradual.

As a result, owning a home is usually cheaper than renting, although this depends upon the area of the country.

Spanish mortgages are overwhelmingly variable-rate loans, and are reviewed annually, so they are not subject to month-to-month fluctuations that can suddenly cause a payment to rise; borrowers have enough time to plan to switch to a fixed rate if they see signs of the Euribor's rising.

Curiously, among those who do not mean to buy a home, the 18% who said before Covid-19 that their family had other properties they could live in, meaning they had no need to make a purchase, have now increased to 21% - but no apparent motive for this relatively sharp rise has been speculated upon.

 

Lockdown sparked a 'moving bug'

Lockdown earlier this year caused residents all over the country to rethink their living arrangements, with major consumer organisation OCU reporting that 28% had realised during their confinement that they wanted to move house.

A month into lockdown, various estate agencies reported a typical 40% hike in the number of website searches for homes for sale with gardens, balconies or terraces – the national shut-in was far easier for those who had outside spaces, especially large terraces with pools, than for residents who were literally stuck indoors for over two months.

Estate agencies in the province of Valencia reported, about a fortnight after the end of lockdown, that they had seen a fivefold increase in requests to view villas or detached, semi-detached or terraced houses with courtyards, terraces or gardens.

In fact, by mid-June, many were saying that all the 'reasonably-priced' ones had been snapped up, and some even reported not having a single property left on their books that was not an apartment.

Those who sought to buy apartments once lockdown rules relaxed to allow viewings to take place wanted balconies or terraces, particularly private ones, since the confinement prevented anyone from straying into communal areas other than for access to essential parts, or to be able to leave the building for necessary errands.

Whatever a person's budget, and irrespective of where they want to live and in what type of property, the market is alive and well with homes up for grabs ranging from rock-bottom to multi-million price tags – you can find over a quarter of a million seeking new owners in our property for sale section.

For those who prefer to remain tenants, either for the time being or for life, over 14,000 properties looking for an occupant, with prices starting from €200 a month, are shown on our property to rent page.

And you can also find around 2,000 holiday homes for rent all over the country here.