Property culture in Spain

In Spain, the origins of the ownership culture go back to the 1950s. At that time, the rural population began to move en masse to the cities to work in industry and services and to improve their standard of living. In 1950, according to the Bank of Spain, 65% of the population lived in urban areas. In 1981, the urban population level had already reached 82.2%. This decade saw the end of the huge reception of emigrants to the main metropolitan areas, as the urbanization rate increased by only 1.8 points during the decade. This is much lower than in previous decades (4.9, 7.8 and 4.1 respectively).

In the 1950s, the Franco regime made an important strategic decision: the majority of Spaniards would live in the cities in their own housing. To achieve this goal, it incentivized the purchase of apartments to live in and penalized their purchase if the goal was to rent them out. To achieve the first goal, in the 1960s and 1970s the government developed a rapid construction program that allowed for the rapid construction of large numbers of public housing units in the country's most populated cities and their outskirts. For example, between 1964 and 1975, 9,780 apartments were built in Belbitja (LlHospitalet de LlJobregat), and between 1970 and 1974, 5,372 were built in Ciudad Badia (now called Badia del Valles).

The abundant supply of real estate, the high number of jobs created, and the affordable price of housing led many immigrants to become homeowners within a few years. The success of the newcomers has encouraged many others to emulate them, and the country's cities have undergone profound changes in their appearance.

The government did not directly penalize the purchase of real estate for rent, but only indirectly. It did not set a maximum limit for the owner, it did not restrict the purchase of real estate in certain areas, and it did not exclude businesses from the market. To accomplish its goal, it created legislation that greatly reduced the profitability of renting and turned it into a non-profit business. To support tenants and harm owners, the government obliged the latter to enter into perpetual leases, allowed two subrogations of the original agreement, limited or froze annual rent increases, limited reimbursement to tenants for building work, and gave the latter the right of first refusal at below market value if owners put their buildings up for sale.

Previous measures have changed real estate in Spain, transforming the country from a country of renters to a country of owners, especially in its major cities. In 1950, 50.8% of the population lived in rented housing, while in 1981 only 20.8% did.

In 1950, those who lived in their own homes mostly lived in small towns, and those who lived in rentals mostly lived in cities. Apartment prices were much higher in cities than in villages, and there were more rental offers in cities, as wealthy families preferred to invest in the most populated capitals. For these reasons, in the provinces of Madrid and Barcelona, the proportion of households living in rentals in 1950 was 82% and 81%, respectively. After the large rural resettlement in 1991, this share fell in both provinces to 16% and 22.3%.

The culture of ownership, internalized by a large part of the population in the second half of the last century, was passed from parents to children and has survived to the present day. This is evidenced by the Fotocasa 2021 survey. According to it, 73% of respondents aged 25 to 34 wanted to buy an apartment in the next five years. This number confirms the preference of young people to buy a home and its small change over the last two decades.

In general, the property culture in our country enjoys excellent health, despite the presence of various and powerful opponents. Prominent among them are high-ranking politicians, economists and real estate analysts, supporters of Spaniards always living in rentals. The others, however, because they themselves live in their own apartment or house. The majority of the population who live in rentals do so temporarily, whether because of working in another city, studying, or because of an insufficiently strengthened relationship with a partner. The majority of those who rent permanently do so because they do not have sufficient savings or the ability to take out a loan to purchase their own home.

There is no doubt that working families had more opportunities to buy homes in the 1960s and 1970s than they do now. In case anyone is lost, I want to make it clear that I have no nostalgia for the Franco regime. I only have bad memories of it.