Monday, September 22, 2008

Buy or rent?

Buying to let seems to be loosing favour amongst Spaniards. That is because, whilst rents have gone up 3.4%, the cost of buying only rose by 1.2% during the year. Even still, many young families prefer to rent accommodation rather than take on a mortgage.

Who can blame them. With house prices falling worldwide, the piso they buy now could be worth a lot less in twelve months time. In any case why pay 1,300€ for a mortgage when you can pay 700€ in rent leaving you with more cash for leisure.

Estimates show that the supply and demand for houses will even out in the first quarter of next year which should stabilise prices. Maybe then, sales will start to pick up again.

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