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How much do buyers have to spend to pay their mortgage?

Posted by Michel B. on 02/08/2019

More than half of the potential homebuyers (53.5%) state that they would have to dedicate between 30% and 50% of all their income to the payment of the mortgage, and even 7.2% would have to allocate more than 50%, according to the study ‘The profile of the homebuyer 2019, carried out by Planner Exhibitions and ST Appraisal Society, which reveals that more and more citizens have to request more financing for their mortgage.

Regarding the impact of mortgage financing on daily expenses, the report of Planner Exhibitions and ST Appraisal Society deepens the financial effort required to buy a home, on the one hand, and the impact that it can reach have in the daily consumption of future owners, on the other.

In addition, this increase in financial effort begins to have a very negative impact on daily consumption, at least for 48% of respondents who say they will have “difficulties to face unforeseen events”, “be aware of each expense” or “suppress their leisure Of diary”. However, 52% of respondents said that the increase in mortgage payments would not have a direct impact on their daily expenses.

The range of purchase budget raised by respondents reveals that 51.1% ranges between 150,000 and 300,000 euros, while for 32.6%, it exceeds 300,000 euros; and only 16.3% have a maximum ceiling of 150,000 euros.

The study confirms the trend of the 2018 edition regarding the decision period for the purchase of a home. This continues to expand, as fewer and fewer people started it six months before the date of the survey. On the contrary, the percentage of people who have been looking for housing between one and two years decreases from 12% in 2018 to 10.6% in 2019.

The general director of Planner Exhibitions, Eloy Bohúa, has said that the percentage of young people (surveyed between 25 and 35 years) looking for a home seems to stabilize around 30% of the total number of plaintiffs, which would cast doubt on the general opinion of that millennials are being expelled from the residential market.

It has also indicated that the budget dedicated to the purchase grows slightly, but it does so at a rate significantly lower than the evolution of the housing price.

As with the search period, the purchase decision period is extended. The percentage of people who expect to buy a house at one year view decreases a little more than 7 points compared to 2018. According to the report, the “upward pressure” of prices is likely to explain this fact in part.

The report is based on the satisfaction and visitor profile surveys that are prepared on the occasion of the celebration of the International Real Estate Exhibition of Madrid (SIMA), with a non-professional visitor profile and over 25 years, being 95% of respondents residing in the Community of Madrid.

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