Who shows greater purchase intention?
The greatest purchase intention has been shown among young people, specifically people between 26 and 35 years of age. 21% of those taking part in the survey and belonged to this age group say that they will buy a property this year. This is compared to the 19% who say they are not too sure and are thinking about it at the moment.
18% of the youngest age group, that is those who belong to the 18 to 25 years, affirm with certainty that they will buy a house, as opposed to 23% belonging to the most undecided. People aged between 36 and 45 have a purchase intention of 17%, compared to 20% among ambiguous and doubtful.
The last group, that is people over 46 years of age do not have as much desire to buy a home. The percentage of those who are certain about their decision in this group is decreasing to people over the age of 66, whose purchase intention is not so transcendental.
To summarise all the above points, it can be said that the most potential consumers i.e. those who show the greatest interest in buying a property, are those who belong to the 26 to 35 age group. On the other side of the scale would be people over the age of 46, whose percentage drops to reach those over 66, whose number is practically residual.
Do Spaniards have enough savings to buy a home?
Many Spaniards want to become property owners in 2018, however, their savings are not enough to fulfill such a wish. When it comes to buying a house and applying for a mortgage, you must have enough savings to be able to cover 35% of the total value of the property in question. The 20% relates to the deposit that must be paid in advance as it allows you to borrow less, while the remaining 15% is towards the property's purchase fees and taxes.
These figures are too high and most consumers do not have such savings in their bank accounts. In fact, 64% of respondents who intend to buy a home in 2018 claim to have less than €10,000 saved. In contrast, 30% of respondents have a figure of around 10,000 and 50,000 euros. Only 6% have a higher amount and can cover the deposit, all the purchase expenses, and the mortgage payment without any problems.
Consumers who do not have sufficient means, but do intend to buy (64% of respondents), must change their financial situation and increase their savings if they want to take a step on the property ladder. As a rule, banks only tend to finance 80% of a house, except in the case of properties that are owned by the bank, in which case they can finance one hundred percent. In this way and as an explanatory example, when buying a house worth €150,000, you must have €50,000 of savings.
Some people have started to take their decision very seriously and are saving as much as they can. In fact, those who manage to save more than €300 per month are the ones with the greatest purchase intention. They are followed by those who save between €200 and €300 per month and finally those who save a lower amount are the ones who have a much lower purchase intention.
Fixed or variable mortgages? That is the question
Consumers who are changing their status from tenants to owners have to take out a mortgage. According to analysts, variable-rate mortgages will have a sub-zero Euribor during 2018. At least during the first three quarters because it seems that in the last months of the year the rate can change. As for fixed rates, the monthly mortgage payment could increase slightly in 2018. The truth is that the popularity of fixed rate mortgages has increased and now they are part of 35% of new contracts. In fact, it is expected that they will continue to have the same success in 2018.
The best fixed rate contracts are those that start with 1.90% in a 20 year term. Although at present, some have higher interest, they are free from expenses and commissions. There is no cost to apply for a fixed rate loan and sometimes the eligibility criteria is minimal. In fact, you may only need to show your wage slips.
In summary, consumers who decide to apply for a variable rate mortgage in 2018 will be pleasantly surprised, at least during the first quarters of the year, as the Euribor is expected to continue in negative figures. There is no doubt that the interest rates will be attractive, although at the end of the year, these loans could become more expensive. In terms of fixed interest rates, the upward trend experienced by banks in 2017 will be consolidated in 2018. There may even be a greater boom driven by the mortgage law that precisely aims to make these loans even more appealing.