On Tuesday EL PERIÓDICO published, based on a study by ‘la Cambra’, that The effort that an average Barcelonan made last year to pay an average rent was 24.6% of their gross disposable family income, compared to 19.3% in 2015. Five more points. And the most curious thing is that the effort was even greater, and it increased even more, in Badalona, less rich (25.3% compared to 18.4% in 2015). And in Saint Cugatone of the cities with the highest income in Catalonia, the effort to access rentals has gone from 21.1% to 26%.
The increase in rents has been general, higher than salaries and a greater part of income must be dedicated to its payment. And that in a few years, especially the last ones, where housing has been highly regulated. Due to the pandemic, the Colau initiatives, some laws and the announcement of others, such as the one that the Government of Madrid approved in spring and that is about to come into force in Catalonia. These data, along with many others, indicate that Rent control has been a measure as ‘good’ as it is ineffective. Because? If the demand for people who want to live for rent grows – the population increases and the purchase of housing is more expensive and mortgages go up – lThe only solution is to increase the supply of apartments for rent, whether public or private. But if the public supply increases very little (or not at all) and the private supply declines because the owners – families or funds – believe that the controls are going to harm them, then the supply does not grow (or even falls) and rents inevitably become more expensive. and difficult.
Therefore, Aragonès would do well to be cautious. Mayor Collboni has said – with some realism – that The control will be positive in the short term, but in the long term, supply must be increased. But if the short term becomes permanent, what is happening happens. And Aragonès and Collboni should know it.
And another study, by the appraiser UVE Valoraciones, also known this week, It’s more worrying. In theory, young people and those on lower incomes should rent – at least for a while – because it is cheaper than buying. Well, just the opposite is happening. In 54 of the 63 cities studied and despite the rise in interest, it is more expensive to pay the rent than the mortgage payment.
Thus, in Barcelona the average rental price is 20.5 euros per square meter compared to 18.16 for the mortgage payment. And the same thing happens in Girona (11.7 against 10.71), in Valladolid (7.9 against 7.1), Seville (11 against 9.64) or Valencia (11.95 against 9.79). The same does not happen in Madrid, Bilbao or San Sebastián and six other of the 63 cities studied. But if now the normal thing is that renting costs more each month than paying the mortgage, It is inevitable that housing fuels social unrest. Young people and families with lower incomes cannot buy because they do not have savings to cover the entry fee (a minimum of 20%) or the guarantees required by banks.
According to an appraiser in Barcelona, the average cost of a rental is 20.5 euros per square meter, higher than the 18.16 for a mortgage payment. And the same thing happens in 54 of the 63 cities studied by Uve evaluations
The memory of the 2008 crisis – when banks and savings banks happily lent 100% – is present. Also the prudential demands of the Bank of Spain and the European Central Bank. Conclusion: young people and families with less income cannot buy and the rent is more expensive than the mortgage payment, leaving them trapped in a distressing and unsustainable situation, since rents rise more than salaries.
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The only way out is to increase the supply of rental homes, whether the owner is a public entity, a family or a real estate fund.. If there is more supply, wherever it comes from, the situation will improve. But many politicians tend to overestimate what they can do with public initiatives and punish the market. They say that the right to housing is a right and cannot be left in private hands. Forgetting that one thing is to carefully regulate (good condition) and another to practically hinder the rental offer.
In Spain, no one complains about the supply of bread, a basic necessity. Would it be the same if politicians had distrusted the profit motive of bakers and on top of that there were few municipal, regional or state bakeries? There would be queues. No, it’s not the same. But think about it.