At what age do Spaniards buy their first home?
According to Fotocasa, 47% of people who currently rent would prefer to own their own home. Buying a home is one of the most important decisions in a person's life. Becoming a property owner, whether for living or for income (real estate is the most common type of investment in Spain), is a very common desire.
This is not, however, the most common option for accessing a first home. According to the Spanish Youth Council's Emancipation Report, 59.2% of people become independent by renting, while only 17.4% opt for a mortgage.
Despite Spain traditionally being a country of property owners, it is not easy for young people to secure their own homes. According to the report European Residential on the rise by consultancy Colliers, the average age of Spaniards buying their first home is 41, well above the average age of 34 across Europe.
Federation of Real Estate (FAI) agrees with this figure: the typical Spanish buyer of residential real estate is a person between 40 and 50 years old, with children and often looking for their first home.
In addition, the FAI reports that the most common way of financing a home purchase is to use personal savings combined with taking out a mortgage, an option chosen by almost 50% of those surveyed.
When choosing a first home, there are various factors that influence the purchase decision. The first of these, in many cases, is price. Experts generally advise allocating no more than 30% of monthly income to mortgage payments.
When choosing a home, decision factors tend to be the basic characteristics of the property, such as the number of rooms, the layout of the home or the living space, rather than aspects that add value, such as a swimming pool, common areas in a residential complex or proximity to schools or recreational facilities.
Another important aspect is the attachment to a previous residence prior to purchase. Up to 42% of individuals, also according to Fotocasa, start looking for a new home in the same city or neighborhood in which they live, while 30% are willing to change neighborhoods but not cities. In total, 72% of those looking want to buy in the same city or town they live in. However, only 65% of them realize this desire, as 7% eventually choose to live elsewhere.
This demonstrates the significant percentage of people who choose to change their place of residence during the process if there are other circumstances affecting this.
26 October
There are two trends when buying a first home:
- The first, more common because of the average age and characteristics of buyers, is to purchase a large house with several rooms to house a family or to anticipate a family. Buying a home is viewed as a lifelong project.
- The second option is to consider buying a home as an investment. In this case, the buyer invests in a first home with a more or less clear time horizon, for example, to live in it for a certain period of time and then receive income from its sale or rent. Treating this purchase as an investment may be a bet to ensure a move to a larger home and with more options if the life situation warrants it.
Housing prices remain stable despite the impact of the pandemic. Currently, there are two factors that make this a favorable time to buy a home.
The first is the current low interest rate environment (euribor was -0.492% at the end of September). The second is the household savings rate, which hit a record 14.8 percent of disposable income in 2020, the highest in 20 years.
This record savings makes the upfront costs of buying more affordable for some homebuyers. This leads to an increase in demand for housing: 43% of Fotocasa inquiries in 2021 were related to buying real estate, up from 39% in the previous year. In addition, according to the Appraisal Institute, interest in new construction and single-family homes outside of major cities has also increased.
Despite the savings levels of some Spaniards, it is most likely that the future owner will need to take out a mortgage to buy the property. One of the most frequently asked questions is what type of mortgage is best for everyone.
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