Access to housing is one of the problems that are currently in the cauldron throughout Spain, since it occupies and worries the vast majority of the population. The scarce supply, a demand that does not stop growing and prices that do not stop rising have created this breeding ground for a problem from which it will be difficult to escape. That is why many economists, such as Gonzalo Bernardos or Santiago Niño Becerra, are coming forward to try to shed some light on such a complicated issue.
One of the many consequences that the housing crisis is having is that many potential buyers are afraid of ‘being left out’ of the market, due to the influx of investment funds that means that demand does not stop growing and the supply of housing is reduced even more. Niño Becerra wanted to talk about this, who reviewed housing policy in Spain in recent years and decades in a recent intervention on the Revolució 4.0 program on Catalunya Ràdio.
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The prestigious professor at the Ramon Llull University of Barcelona stressed that the origin of the problem is not only due to recent decisions or the management of a specific government, but to the direction that housing policy has followed in Spain for more than seventy years. According to Niño Becerra, “since 1950 or 1955,” regardless of the different governments the country has had, housing “has been oriented toward ownership, on the one hand, and secondly, toward speculation.” Thus, the protected housing developments that were common at the time ended up contributing to the speculative market once their short period of protection expired.
People buy out of “fear of being left out”
In his speech, the economist wanted to go further into the role of the different agents that have influenced the rise in prices, and pointed out that currently the main buyers are not families, but “investment funds, large or small, and investors in general.” Furthermore, he distinguished the behavior of individuals who, driven by the concern of not being able to access housing in the future, act out of fear: “Even though now, and pardon the expression, you are absolutely bored to be able to pay for this housing, within a while it will be absolutely inaccessible, so they are afraid of being left out,” explained the economist. This fear, he noted, intensifies pressure on prices and feeds a vicious circle that makes access to housing even more difficult for the middle class.
In the current scenario, the combination between individuals seeking to guarantee their access to housing and large investors has caused an “absolutely brutal price imbalance,” in the expert’s words. Niño Becerra made reference to the phenomenon known in the United States as FOMO (“fear of missing out”, or fear of being left out), highlighting that “there are people who are getting into debt, drowning in credit and asking for money to be able to buy a home, because they have entered into the dynamic of being convinced that next year will be more expensive and the next even more so.”
Prices will stop rising because “the ability to pay is the natural limit”
Asked by journalist He expressed it clearly: “Housing aimed at the middle class will stop rising. The ability to pay is the natural limit,” he stated during his intervention on Catalan radio.
He also clarified that this limit does not affect luxury homes, whose behavior is due to other factors, but insisted that the increase in the price of the general residential market will inevitably come up against the economic restrictions of families: “Paying means having the capacity for debt, an increase in salary, that is, a set that no longer allows them to pay more. When that moment is reached, that housing oriented to the middle class will stop rising.”