🪎 How much house does €250,000 buy?
Here's a hint: It's a whole let less than it used to be.
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Spain's incredible shrinking homes
Inspiration comes when you least expect it. As I was reading around Spanish real estate news this week, I came across an article that asked, in its headline, “¿Qué vivienda puedes comprar por 250.000 euros? Un minipiso en Madrid o San Sebastián frente al pisazo en Lugo". Or rather, “What kind of home can you buy for €250,000? A tiny apartment in Madrid or San Sebastián, versus a super-flat in Lugo.”
And I thought, “What an interesting question…and what if you could see the answer?” Because we usually come at the home-price debate through sterile numbers — “housing's up 14.5% since last year,” and so on. But most of us looking to buy a home have a very different starting point: We have a certain quantity of money to spend, and we want to know what we can get for it, and where.
What rising prices mean is less house for the money. That's not a guesstimate: the houses being sold in Spain are shrinking. In July (the most recent month of data from Spain's notaries), the number of house sales fell 11.1% from a year ago, while the average price per m² rose 7.7%, and the average size of the homes sold dropped 2%, falling in 12 of Spain's 17 autonomous communities. (Side note: the size of the average apartment — as opposed to a house — fell 5.5% in July, the third month in a row their size had fallen at least 5%. Pretty soon all us city-dwellers are gonna be in tiny studios.)
In plain English, that means people are buying fewer, smaller homes for more money. It's another sign of an undersupplied, overpriced market where people are forced into progressively smaller/uglier/further-away homes than a person in their position might have expected in the past (and why you get stories like this, of an employed 38-year-old who has to live with three roommates).
And so I thought it might be interesting to consider how much less you got these days than just a few years ago. Credit where credit is due — the headline quoted above was inspired by a report put out by Vivegreen, an online realty belonging to UCI, a mortgage bank.
Let’s get into it: