The housing market in Spain
15/01/2014 | Lidia Gómez Martínez (Alumna UC)
What has happened with housing prices? What is the real-estate bubble and who caused it to burst? I would like to answer these questions in a colloquial way, explaining it as people on street would do, because these are problems which affect everybody.
While the standard of living in Spain increasing (levels of education, salaries, etc.) the prices of houses were growing too. In a period of thirty years, the price of the housing increased its value ten times. It was more or less okay when people could afford these prices, but now it is a very big problem, because there isn´t enough work to support these prices.
Since people had enough money to pay, the prices of houses started to rise. People spent money and didn´t think about what would happen if they lost their jobs. Moreover, banks gave money to everyone. If someone couldn´t pay their mortgage, it didn´t matter, because the bank took the house and then sold it in a higher price than the amount of the mortgage.
The problem started when people didn´t have enough money to paying for their houses (returning their mortgages and for buying new houses). Now, banks have a lot of houses and little money. Because banks don´t have >money, they don´t give credit to anyone. People haven´t got money to spent, and companies haven´t got money to produce so they have to dismiss their workers. To sum up, there are people without work and without money. In addition, there are many enterprises associated with housing market that haven´t got work (building work, construction supplies…). This translates into a lot of people without work.
So, the problem is that people requested more money than they could return, and banks gave it because if people couldn´t return the money, they got people´s houses. Now, we have banks that have houses but not money, enterprises that haven´t got money, production or workers, and people who don’t have work, money or a house.
Nota: Este artículo ha sido elaborado por Lidia Gómez Martínez, alumna de la Universidad de Cantabria, como una de las actividades enmarcadas dentro del programa de capacitación lingüística, dando su permiso para la publicación del mismo en FxM.