Tecnocasa and UPF warn of a "cycle change" in the housing market
30% of the population lives in areas where an average family cannot access housing, according to a study
BarcelonaThe real estate franchise Tecnocasa has turned to the thousand offices it has throughout Spain to analyze the housing market situation and conclude that "clearly, there is a change in cycle," in the words of the company's CEO, Paolo Boarini. "It is very difficult for prices to continue rising," he warned at the presentation of the report prepared by the Tecnocasa-Pompeu Fabra University (UPF) chair this Wednesday.
In fact, Boarini warned that the shift has already begun to materialize: "The price increases we have seen until a few months ago are no longer occurring". The report analyzes both supply – what the seller demands – and demand – who buys, how, and why.
UPF Economics professor José García Montalvo pointed out that "the seller has exaggerated price expectations for the future," and that they are "very different" from those of the buyer. He thus explains the fact that price negotiation (haggling) has increased compared to last year – at historic lows – and the extension of the period to close the transaction once the buyer has made an offer – which stands at 79 days, compared to the historic low of 73.
According to Montalvo, after the tug-of-war, the transaction "closes more or less close to the price the seller wants," who is "the one who has the power." "Fewer transactions are closed, but at a price close to the seller's price, and that is why it continues to rise," explains the professor.
"The market is not what sellers think. Surely the only way they will realize it is if transactions fall even further: that they lose power in this negotiation between seller and buyer," he concludes.
Worsens housing access
In this context, affordability of owner-occupied housing is worsening. Tecnocasa and UPF estimate that 30% of the Spanish population lives in "limited accessibility zones," where a family with an average income can no longer afford to buy a home with a standard mortgage, compared to 9% of the population exposed to this situation in 2021.
In Barcelona, it extends to approximately 75% of the population, as in Madrid, Palma, or San Sebastián. In fact, 29 out of the city's 40 postal codes are "limited accessibility zones": beyond Les Corts, Pedralbes, or Sant Gervasi, areas like Guinardó, Vallcarca, Tetuan, Vallvidrera, Gòtic, or Hostafrancs also suffer from this situation. The report states that the average mortgage in Barcelona has an annual installment of around 17,200 euros, and 57,500 euros per year are needed to be able to pay it, while the average income in the city is around 50,099 euros.
To calculate this, the authors used the mortgage access ratio (RAH), calculated with data from the INE, the Bank of Spain, and notaries. This ratio relates the income a family would need to pay a mortgage – 80% of the property price, over 25 years, and not exceeding 30% of total income – to the economic resources they actually have.
The decrease in investment affects the rental supply
Regarding demand, the analysis reaches two fundamental conclusions: on the one hand, the majority of buyers – 72.7% – acquire their first home and, on the other hand, they need to take out a mortgage to make the operation effective – 73.9% –. Boarini recalled that, in this area, Tecnocasa "basically" works" with individuals, even the few investors who come to us are small and buy one or two homes". Among the analyzed population, both trends are on the rise compared to 2023: operations to buy the first property represented 67% in 2023, and purchases with a mortgage were 57.8% of the total.
In parallel, the CEO of Tecnocasa assured that the figure of the investor "has practically disappeared" because "at these price levels, they are increasingly less interested". In other words, investors believe that buying a home to sell it later or to rent it out "is very unprofitable at the moment". Sales for this purpose have gone from 25.3% in 2023 to 19.3% this year.
The decrease in home purchases as an investment is accentuated in the city of Barcelona, where it falls to 9.9% of the total, while in 2016 it was 36.8%. In this case, "it is the lowest proportion in the entire historical series", which began in 2013, emphasizes the director of the analysis department of Tecnocasa, Lázaro Cubero.
The expert establishes a link between investment purchase and rental supply. "More and more owners in Barcelona are considering selling their homes instead of opting to renew the rental contract," he assured. If in 2023 24.1% of flats for sale were rented out, in 2026 the proportion rises to 30.4%.