Spain is a country of homeowners, at least until now, but will it continue to be so in a decade? Industry experts believe that renting will gain followers over the next few years, some because they will choose that way of life, others because they will have no choice but to do so due to the impossibility of accessing the necessary financing to be able to become owners.

For the moment, millennials have already become the first generation to significantly consolidate the rental option, since according to the data provided by Atlas Real Estate Analytics to elEconomista , the percentage of people between 30 and 44 years old who live rent is 34.07% and it is expected that, within four years, in 2025, this ratio will reach 40.33% . If the forecasts are met, this would mean an increase of 64.9% in just one decade, since in 2015 only a quarter of the population of the same age lived in rent.

This trend is further intensified if we look at what is known as generation Z , since, in this case, it is expected that 63.4% of the population under 29 years of age will live in rent in 2025 . Currently, this generation already gives a higher priority to rent than to purchase, with a ratio of 58.2%.

The percentages totally change if you look at the two generations before millennials , Gen X and Baby Booms . Thus, according to data from Atlas Real Estate Analytics, of the population between 45 and 64 years old, barely 13% will live under the rental formula in 2025, compared to 15% in 2015. In the case of people over 65 years the rent will be anecdotal with 6%.

Great rental tour in Spain
“The rental trends are evolving towards a behavior similar to that of the great European powers such as Germany, which has higher percentages of the rental population than those found in Spain, so there is still great potential for growth to reach figures such as the of these countries “, explains Alejandro Bermúdez, CEO Atlas Real Estate Analytics.

But for this to happen, it is necessary to expand and develop a new park of flats for rent, since the one that currently exists is insufficient and in many cases obsolete.

“We have identified in the Build to Rent market a need to promote up to 991,545 homes to reach the average European rental population, and 1,841,440 to reach the average of the main powers such as Germany, France or Italy “, points out Bermúdez, who assures that this new offer is aimed mainly at young people, who” either due to lack of resources, or due to a cultural issue do not want to acquire a home that they own. In this case,we consider that it is mainly a question of inaccessibility, since, culturally, Spain has always bet on property “.

Difficulties to finance
In fact, although in most cases the payment of the mortgage payment is lower than the rental income, many young people cannot access the purchase due to the impossibility of paying the entrance fee , something that is not within reach. of all, especially if they do not have family support to help them collect 30% of the amount of the operation.

As of today, the most normal thing is that the granting of a mortgage is for 80% of the approved appraisal value of the home to be purchased. Therefore, the buyer needs to have their own funds that allow them to meet the remaining 20% ​​of the value of the acquisition that is not financed by the bank.

You must also take into account the payment of VAT, which in the case of a new home is 10%, or the Property Transfer Tax (ITP), if it is second-hand, in addition to notary or registry expenses.

The problem of access for young people is reflected in the statistics, since only 8.17% of the total mortgages signed in 2021 correspond to those under 35 years of age, according to Hipoo . A figure that joins the percentage of those under 35 who have applied for a mortgage, which has decreased by 2% compared to 2020, to 43%.

According to Hipoo, of the total number of applications made by people under 35 years of age (in an indebtedness ratio of no more than 35%), the percentage of young people requesting more than 80% of financing in 2021 stands at 54.19 %, 6.5 points higher than in 2020. Those who request between 80 and 90% of financing, the percentage has been 21.76%, surpassing the 18.89%, from last year. And those who request more than 90% financing represent 32.43% in 2021 compared to 28.8% in 2020.

Ricardo Sousa: “84% of young millennials and generation Z want to buy in the future”

But despite the barriers to buying a home, young people do not lose hope. In this sense, Ricardo Sousa, CEO of Century21, assures that when they work with the youngest, “the future perspective continues to be the purchase of a home.” “84% of young millennials and generation Z want to buy in the future and have that feeling of ownership that is something very cultural in Spain. If we go to France the dynamics are different and even with inverse figures.”

The expert explains that in his real estate network “more than 70% of the operations we do with young people are for sale.” Sousa also points out that this part of the population has an average budget of less than 700 euros per month for the mortgage payment and that their access to the shopping market has, in most cases, family support to be able to provide the necessary initial savings.

“In this way, for the rent to be competitive it should be below those values, and even so we would be talking about a high effort rate”, specifies the CEO of Century21.

Along the same lines, the economist Gonzalo Bernardos, believes that young people want to be owners. “That does not mean that they want to buy when they are 25 years old, but nobody wants to live in worse conditions than their parents and what they have seen at home is that the family owned a home,” explains the expert, who points out that it is true that “The desire to buy has been delayed, because in life everything has been delayed.

Before, a young person was the one under 30 years old and now the one under 40 years old is so. In addition, there have been two major crises in the middle. The millennial generation, which I call the jinx generation, has caught both of them, so with economic circumstances worse than those of their parents, they resign themselves to renting. ”

Bet on this model
However, not everyone chooses rent out of obligation, there is also a part of young people who prefer this way of life. This is explained by Borja Varela, Director of Alternative Assets at Colliers International Spain, who recognizes that traditionally “due to our culture, Spaniards have tended to buy a home as a defensive method.”

But the purchasing trend among young people is “radically changing because they do not have the capacity to save that there was before, since wages are not in line with the price of houses .” However, the manager assures that a part of the young people what they are looking for in the rental is flexibility.

“The world of work today is not the same as it was before. Temporary contracts are the order of the day and it will be very normal in a ten-year professional career to have gone through six companies, when our grandparents or our parents worked in one or two companies in his entire life, “says Varela.

To the less stable and more flexible life that millennials have experienced and that generation Z will undoubtedly experience, we add “the international concept, which Americans call sharing, which consists of sharing everything.”

“With the Covid there has been a lapse in this sense due to the health issue, but there is a very clear trend towards this concept,” says the Colliers expert, who highlights that the new rental projects already have many common areas with spaces for coworking to be able to work from your building, as well as a gym or meeting areas.

“With all this we see a very clear trend of buying towards rent due to sociodemographic factors and current economic factors that are emphasizing it, such as the economic recession and the restriction of banks to mortgages due to fear of delinquency and additionally the shortage of professional quality product for rent, “says Varela. All this converges in the appearance of new housing solutions such as coliving, which are still products that are made ad hoc according to age ranges.

“The student residences are for a university audience. Coliving goes to a higher income range, since it has its nature in an urban location and is for young professionals. If we go to BtR projects they are residential concepts for families young people “, explains Varela, who highlights that now apartments for the elderly are also being created, to cover the niche that ranges between retirement age and 82 years, the average age of entry into the nursing home in Spain.

The plenary session of the Regulatory Council of the Denomination of Origin (DO) Cava has approved by majority to limit production for the second consecutive year to support prices and “contribute to rebalancing the market.”

For the next harvest, it has been authorized to harvest 11,000 kilos of grapes per hectare throughout the Cava Region. This figure is 1,000 kilos more than in last year’s campaign, but it is still 1,000 kilos below the usual volume.

The president of the Regulatory Council, Javier Pagés, considers that “the conjunctural requirements necessary to restore the 12,000 kilos per hectare have not yet been met.” The objective of the measure, according to the president of the institution, is to advance in correcting the surplus situation of the sector caused by Covid-19 and by the surplus of hectares in plantation of the DO.

Thus, it has made a new appeal to the unity and responsibility of all the agents of the sector to achieve “self-regulation of the market”. The will is to lay the foundations for the recovery of the prices paid for the grapes. Pagés has wanted to make an express defense of the winegrowers, and is convinced that “decent prices for production” must be paid to ensure the sustainability of the sector.

In this sense, it has claimed that “the entire value chain of the Denomination of Origin, and all public powers, must act responsibly to guarantee its orderly and sustainable growth”.

Cava war
For years, the Cava Regulatory Council has been living an open war with the Junta de Extremadura, which claims the increase of crops for the DO Cava in its territory, and which has won several legal battles. The last one was in January, when the Supreme Court annulled the articles of Royal State Decree 536/2019, which limited the area of ​​vineyard plantations for cava production.

The Government of Spain had established that they would take into account the proposals of the DO Cava Regulatory Council to approve the surface of new plantations within their scope of action, but the Supreme Court eliminated this point.

Then, the Junta de Extremadura announced that it would request the cancellation of the cultivation restrictions for Cava in the community made in the years 2020, 2021 and 2022, and that it would request the concession to cultivate new hectares.

However, the Government – competent in supra-autonomous denominations of origin – maintains the prohibition of new cava grape plantations until 2022, according to the Official State Gazette (BOE) in March. The Extremadura administration has once again lodged an appeal.

With more than 70% of international sales, Cava is the Spanish DO that exports the most. It brings together more than 38,000 hectares of vineyards in seven autonomous communities and more than 6,800 winegrowers, and its 370 associated wineries are present in more than 100 countries.

Colonial launches 100% of its French subsidiary Société Foncière Lyonnaise (SFL) in a transaction that amounts to 800 million euros and with which it will increase its exposure in the Paris office market by 1,000 million.

The company has already reached an agreement with Predica, the personal insurance subsidiary of Crédit Agricole Assurances, to acquire the 12.9% that it has in SFL and thus achieve 94% and will subsequently launch a mixed voluntary takeover bid in cash and shares on the rest of SFL shareholders “with the aim of increasing participation and providing liquidity to shareholders who consider it”, as explained by Pere Viñolas, CEO of the equity firm.

The objective of this movement, which has been among the Socimi’s plans for years, is to strengthen its presence in what is “the largest office market in the eurozone”, according to Juan José Brugera, president of Colonial, and that in this way it would have a weight in the company’s assets of 60%.

The company carries out this operation with “a 13% discount on the appraised value of the assets,” says Viñolas, who highlights that this transaction represents a simplification of the Socimi’s shareholding structure.

In this way, it specifies that Predica “will cease to be a shareholder of SFL and will become a shareholder of Colonial with an approximate presence of 4% and at the same time increase its strategic alliance with SFL through joint participation in different assets.” Viñolas also points out that this operation will entail a “little relevant variation for Colonial’s main shareholders,” among which the Qatari sovereign fund stands out with 20%.

How is the operation structured?
To carry out the purchase of Predica’s stake and the takeover bid, the operation will be completed with an asset swap worth 300 million euros, a capital increase of 350 million euros and a cash outlay of another 150 million. euros, bringing the total operation to 800 million euros.

Specifically, Colonial will acquire, on the one hand, the 5% that Predica maintains in SFL. On the other hand, Predica will transfer 8% of its stake in Colonial’s subsidiary to SFL, within the framework of a share buy-back program.

In the case of the mixed voluntary takeover bid, to be held this month, Colonial will offer the minority shareholders of the French subsidiary a consideration consisting of 46.66 euros and five newly issued Colonial shares for each SFL share, which “It has a market value of about 89 euros and means buying with a relevant premium” of 43% compared to SFL’s price, “which will be at 62 euros,” according to Viñolas.

Colonial will not use the forced sale procedure after the completion of the OPA and SFL’s shares will continue to be listed on Euronext Paris, at least in the short term.

This was explained by Viñolas, who pointed out that for the moment the operation “will not mean the disappearance of the subsidiary or its exclusion from the French listing”, although it has acknowledged that “in the medium term, full integration is part of our objectives ” and also highlighted that the operation will increase the company’s” free float “by approximately 400 million euros in terms of net asset value.

60% of assets in Paris
With this action, the group seeks to simplify its shareholding in the French subsidiary and improve its exposure in the Parisian market, where it will now hold 60% of its assets.

As Viñolas clarified at a press conference, after this capital increase in Paris, the company will have assets worth 12,000 million euros, of which 60% will reside in the French capital , 25% in Madrid and another 12 % in Barcelona.

“What we do with this operation is to opt for Paris in an investment movement of SFL in the ‘prime’ of Paris”, explained the president of Colonial, Juan José Brugera.

Likewise, Bruguera stressed that the transaction in the largest office market in the Eurozone will reaffirm the group’s commitment to quality assets, offering “the best return for our shareholders and strengthening our platform to continue growing in Europe.”

After the operation, Colonial has ensured that the long-term relationship between SFL and Predica will continue with the creation of new joint ventures, 51% owned by SFL and 49% by Predica in certain assets such as 103 Grenelle, Cloud , Cézanne St. Honoré and 92 Champs Élysées.

For its part, SFL will fully own the assets of 90 Champs Élysées, 104 Hausmann, Galerie Champs Élysées and Washington Plaza, acquiring Predica’s stakes in the companies holding these assets.

It is planned that the transfer of 5% of Predica in SFL to Colonial and the exchange of shares and assets between SFL and Predica will be done simultaneously. The company has clarified that all these transactions are subject to the usual conditions (including the waiver of the council’s right of first refusal and the authorization of the AMF on the takeover bid) that must be fulfilled before December 31, 2021.

The group chaired by Brugera has called an extraordinary general meeting of shareholders to approve the contribution of shares by Predica and the capital increase as a result of the public mixed acquisition offer, which will take place on June 28.

Apple has already communicated to its employees the hybrid plan back to the office that will be implemented in the autumn and has surprised the rigidity of the approach, since they will only be able to continue working remotely on Wednesdays and Fridays if the head of each section authorizes it. .

It will be from September when the technology giant ends the total teleworking system that has been applied since the pandemic broke out. The hybrid model that CEO Tim Cook exposed by letter to workers and that The Verge has advanced involves assistance on Mondays, Tuesdays and Thursdays and leaves the authorization for employees to work remotely on Wednesdays to the management of each team and on Fridays.

To promote family reconciliation, employees will have the opportunity to telework up to two weeks a year , “to be closer to family and loved ones, find a change of scenery, manage unexpected trips or a different reason”, according to the explanation by Cook.

Speaking to CNBC , Kate Lister, president of the research and consulting firm Global Workplace Analytics, has valued as “a little strange” the announcement of Apple, not because of the 3/2 system “but in the fact that they are specifying on business days such as Monday, Tuesday and Thursday throughout the company. “

Although he sees certain advantages in the little flexibility (knowing in advance who will be in the office, knowing the number of people to specify needs such as cleaning services or food …) he also considers that limiting the autonomy of employees could lead people to give up. And it is that according to a survey of 1,000 adults and published by BloombergIn May, 39% of Americans would consider quitting if their companies weren’t flexible about telecommuting in the future.

Apple’s plan is known when those of some of its biggest competitors have already transcended. Google announced in April that in September it would also implement a system of three days of office work for two days from home, but in its case it does not specify the specific days on which workers will have to go to the office.

Microsoft, for its part, will allow employees to telecommute half the time or full time if authorized by the team manager. Even more permissive will be Facebook . Last summer, its chief executive, Mark Zuckerberg, estimated that half of the organization will continue to work remotely for the next five to 10 years.

It is Twitter, however, the technology giant that has opted to allow teleworking “forever” for employees who prefer this system. This was announced in May 2020, in the midst of a pandemic.

The average price of finished housing (new and used) in Spain registered an increase of 1.3% in May, thus registering five consecutive months of year-on-year increases , according to the Tinsa IMIE General and Large Markets index. The data point to a consolidation of a generalized trend of recovery at two speeds, highlighting the islands and the Mediterranean Coast.

“The average price in Spain consolidates a recovery trend with moderate growth. The islands and Mediterranean Coast groups lead the upward movement, with the highest interannual and monthly increases. In the rest of the geographical aggregates the trend is stabilization, in an environment of contained figures “, explains Andrea de la Hoz, senior analyst at Tinsa.

The islands and the Mediterranean Coast, the biggest increases in the average price in interannual rate
The analysis -which divides the territory into five large areas that represent the main strata that make up the housing market- shows how all the areas analyzed reflect growth in their average values ​​compared to May of last year, although the largest increase corresponds to the islands , with an increase of 4.6%, followed by the Mediterranean Coast, with a year-on-year increase of 3.2% in the month of May .

Below the national average, according to data from Tinsa, the price of housing in capitals and large cities (with more than 50,000 inhabitants) leaves a growth in the last year of 0.4%. The average value in the metropolitan areas group registered an increase of 0.2% year-on-year in May, after growing by 1.7% last month .

The smaller municipalities located in the interior of the peninsula and on the Atlantic coast (grouped in other municipalities) “consolidate a contained upward trend and moderate the figures of the previous month,” says de la Hoz. The average value in this group fell by 2% between April and May, leaving the year-on-year growth in May at 1.1% .

Balance of the year
The average price in Spain has experienced a year-on-year growth of 0.8% in the first five months of the year , with the Islands and the Mediterranean Coast standing out as the most dynamic areas, with an average year-on-year increase of 4.3% and 2.1%, respectively. Despite the moderate recovery experienced by capitals and large cities, their average variation so far in 2021 is slightly negative (-0.7%), according to Tinsa.

Housing in Spain has appreciated 20% from its 2015 lows
The index data, calculated from the finished home appraisals carried out by Tinsa, show that housing in Spain has appreciated 20% from its minimum registered in February 2015 and remains 31.1% below the price maximum reached in 2007 .

Second hand housing
For its part, the price of second-hand housing rose 0.8% year-on-year in Spain in May , according to data from the Fotocasa Real Estate Index, to stand at 1,893 euros / m2. This increase represents the seventh year-on-year rise in house prices after chaining 11 months of year-on-year declines (from December 2019 to October 2020).

“Although the price of housing continues to rise, the truth is that it is doing so at a more moderate pace. This temperance could be a sign that the great boom in buying housing detected after the lockdown is calming down as the real estate sector It is responding to the demand that has arisen and the transactions are being completed “, says María Matos, Director of Studies and Spokesperson for Fotocasa.

The price of second-hand housing rose in nine autonomous communities in May compared to the previous month, leading the largest increases in the Valencian Community (1.8%), Andalusia (0.8%) and Castilla-la Mancha (0.7 %) . Madrid and the Basque Country, despite the fact that both regions have registered a monthly decrease of 0.1%, are the regions with the most expensive second-hand housing prices in Spain with prices of 3,099 euros / m2 and 2,859 euros / m2, in each case.

Regarding the provinces analyzed, in 50% of them the price rose in May, with the highest rise in Valencia (5%) and Soria (4.9%). On the other hand, the capitals that registered the greatest monthly increases were Soria (4.0%), Girona (2.6%), Toledo (2.5%) . On the other side of the scale, the largest Huesca and Jaén led the biggest declines in May, with falls of 3.3% and 2.4%, respectively.

The United States created a total of 559,000 jobs in May while the unemployment rate dropped to 5.8%. Economists had expected at least 671,000 jobs to be created and the unemployment rate to stand at 5.9% last month.

In this way , unemployment fell by 0.3 percentage points since April and the number of unemployed fell by 496,000 people, to 9.3 million. These measures are down considerably from their recent highs in April 2020, but remain well above their pre-pandemic levels (3.5% and 5.7 million, respectively, in February 2020).

May’s disappointment came after April fell well below expectations , as the revised upward figure of 278,000 continued to fall far short of the initial estimate of one million people . If we take into account the combined reviews of March and April combined, it could be said that 27,000 more jobs were created than previously projected.

The labor participation rate varied little, standing at 61.6%, within the range in which it has remained since June 2020 and 1.7 percentage points below that registered before the pandemic. Last month around 16.6% of employees teleworked , down from 18.3% the previous month.

By sectors, leisure and hospitality generated 292,000 jobs , as more than 50% of the adult population has already received at least one dose of available vaccines and both state and federal governments relax restrictions related to the pandemic. That said, employment within these sectors is 15% below when compared to pre-Covid-19 levels, that is, at least 2.5 million more payrolls would have to be created.

In May, employment increased in public and private education , reflecting the resumption of face-to-face teaching. In this way, 53,000 jobs were added in local public education, another 50,000 in state public education and around 41,000 in private education.

Health and social assistance added 46,000 jobs while the manufacturing sector increased by 23,000 payrolls. The same figure generated by transportation and storage. Construction destroyed 20,000 jobs while payroll creation in retail and professional services showed little change.

Median hourly wage on private nonfarm payrolls rose 15 cents in May to $ 30.33, following a 21-cent increase in April.

These figures come after weekly claims for unemployment benefits fell for the fifth consecutive week between May 24 and May 28 to 387,000 claims. A new low since the pandemic began. That said, despite the decline in initial applications, the trend for continued applications continued to show elevated levels, justifying concern about Americans hesitating before returning to the job market .

Given the context of the labor market, the current situation would continue to justify the need to maintain stimulus from the Federal Reserve. The central bank of the United States buys 120,000 million dollars a month in debt (80,000 million dollars in Treasuries and 40,000 million dollars in assets backed by mortgages) in addition to keeping the price of money in a range of 0% and 0, 25%.

The rise in prices, which Jerome Powell, Fed Chairman, considers to be temporary, has raised doubts in the market. Despite the patience shown by the Federal Reserve to date, it is expected that at the end of August it anticipates its intention to begin reducing its asset purchases, something that could begin in the first quarter of next year.