Where do you live and for how many years? Renting or buying a house?

Real Estate Price Buying a home in Spain has become a very difficult investment for young people. With rental prices skyrocketing, the question now arises as to whether it is more profitable to buy or rent, depending on your location and age both options can be more or less attractive. Buying or renting - which is now recommended at current prices? Paying a mortgage now requires less financial effort than it did 15 years ago. Buying a home is declining in all regions of Spain due to the high cost of financing.

A study conducted by Idealista

links the sale and rental prices of real estate in Spain, amid increased controversy about house prices. According to this analysis, the purchase of an average home in Spain requires the payment of an amount equivalent to 14 years of rent for the same property.

Home price increases seem to be endless, making it difficult for people with low incomes to access real estate. Moreover, the annual increase in secondary housing prices in May was the highest since August 2006.

In Spain, rising house prices are causing problems for many renters. As data from the Ministry of Transport, Mobility and Urban Development (Mitma) shows, the average assessed value of free housing rose by 3.1% in the first quarter of the year, the highest rate since the last quarter of 2010.

How many years of renting is equivalent to buying a house?

Buying a property in Spain is equivalent to 14 years of renting, according to a recent study by Idealista.

While there is no specific threshold that determines which option is best, other factors such as personal preference, financial situation, and expected length of stay also play an important role.

Thus, the more years of rent required to pay for the house, the more attractive the choice to rent rather than buy will be to the renter. The reverse is also true: if fewer years are required, buying will be a more interesting option than renting.

This figure is determined based on sale and rental prices. Thus, if many years of rent are required to purchase a home, it is because sale prices are high compared to rental prices. Conversely, if few years are required, it means that sale prices are low compared to rental prices.

Where is the most profitable place to buy a home to rent out?

The analysis of sales and rental prices reveals very significant data. The city of San Sebastián ranks first with an average payback period of 27 years, followed by Pontevedra, Palma, and A Coruña, where it takes 22 years of renting to equal the cost of buying. Pamplona takes 21 years, while in Cádiz, Madrid, and Vitoria it takes 20 years. In these nine cities, renting proves to be more attractive compared to other Spanish capitals.

Barcelona stands out with its 18 years, which is significantly higher than the 12 years in the city of Lleida or the 13 years inMurcia, Huelva, and Jaén. These cities are positioned as more interesting places to buy based on PER.

This data highlights the differences in the real estate market across various Spanish cities, pointing out rental opportunities in some areas and the advantages of buying in others, depending on the ratio of sale prices to rental prices.