Buying a home now cheaper than renting in Murcia, but saving the deposit remains the biggest hurdle
Monthly mortgage payments are 27% lower than rent in the city, yet buyers still need more than €50,000 upfront
For many people living in the Region of Murcia, owning a home can now cost less each month than renting one. But despite that apparent advantage, thousands of households still find themselves unable to buy because they simply cannot save the large deposit required.New figures from property portal Idealista show that the average monthly mortgage payment in the municipality of Murcia currently stands at around €546. Renting a typical two-bedroom property, by comparison, costs about €751 a month. In practical terms, that means buying is roughly 27% cheaper each month than renting.
However, the biggest obstacle for would-be buyers is the upfront savings needed to secure a mortgage. In the city of Murcia, households must have around €50,524 saved before they can qualify for financing.
The situation reflects a wider national trend. Across Spain, the average mortgage payment for a two-bedroom home is €698 per month, while renting a similar property costs €1,088. That makes the mortgage payment around 36% cheaper, although buyers still need an average of €64,568 in savings to access a loan.
Property prices have also been rising steadily in the Region of Murcia. Recent reports show housing prices have surged by more than 30% in some coastal areas, adding further pressure for those hoping to enter the property market.
The increases are not limited to the largest cities either. While Murcia and Cartagena remain key property hotspots, rising prices are also being recorded in municipalities such as Los Alcázares, San Javier and Alhama de Murcia.
Even though buying may now be cheaper month to month, many households still struggle to reach the starting line. Mortgage costs have risen sharply over the past decade, increasing by around 63% and making it harder for buyers to qualify for loans and build up the savings needed for a deposit.
For those who cannot save that initial amount, renting remains the only option, even as prices continue to climb. Recent figures show tenants in Spain are now spending an average of 38% of their wages on rent, highlighting the growing financial strain the housing market is placing on households.
Across Spain, the amount buyers must save varies widely. Palma currently requires the largest deposit at €147,116, followed by San Sebastián at €137,700, Madrid at €117,793 and Barcelona at €103,172.
At the other end of the scale, Zamora requires the lowest savings at €32,996, with Jaén and Lleida also among the most affordable provincial capitals.
The result is a housing market that increasingly leaves many residents caught in the middle. Buying may be cheaper on paper, but without tens of thousands of euros saved in advance, it remains out of reach for many households.
Image: digital representation
Financial Advice Issues for Expats in Spain
I have been a Qualified Financial Adviser for almost 35 years now. 25 years in the UK for major institutions such as Natwest, RBS and Royal London. I have been in Spain giving expats financial advice now for 10 years and it is quite remarkable the different approaches as well as advice that are required for an expat now living in Spain. Blacktower is a company that has specialised in providing the best solutions for its clients living outside the UK for 30 years also.
The currency issue is always high on the agenda and a discussion for the long-term future has to be taken onto account. Questions like What will happen if one partner dies? Will the other remain in Spain? What about other family members? What Inheritance tax provisions do you have in place? The list goes on and on.
Existing portfolios and investments that were the mainstay of portfolios in the UK may now be obsolete. An example of this is quite often tax efficient products in the UK like ISA’s and previously held TESSA’s: PEP’s actually have low growth rates and provide no tax advantage to a Spanish fiscal resident.
Existing pension holdings either paid by the state or private pensions built up through working lifetimes are topics that have to be covered. Many expats have lots of small pensions from many ex employers and can be confused by the communications and administration in dealing with them. At Blacktower we specialise in advising on how to consolidate and bring all these pensions together in one place.
Bank accounts and investments in Spain always bring up lots of questions too. Quite often the small print associated with financial products in Spain is in Spanish this can make it very difficult even if you have a good grasp of the language. Understanding Jargon in English is sometime difficult enough. I provide clear easy to understand letters and documents in English so that you fully understand any terms and conditions before making a decision.
Advice on tax efficiency is just as important and offering good returns. There are products available exclusively for Spanish expats that can provide invaluable benefits. Having a good base knowledge of the tax implications both now and in the future is an essential ingredient to making a sound decision.
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The above information was correct at the time of preparation and does not constitute investment advice and you should seek advice from a professional adviser before embarking on any financial planning activity.
This communication is for information purposes only and it does not constitute advice or a recommendation. The value of investments can go up as well as down, and investors may not get back the full amount invested. The Blacktower group of companies operates across multiple jurisdictions, each authorized under its respective regulatory license. For further information, please refer to the relevant regulatory page.
