The impact of the ECB's interest rate hike on access to housing.

The European Central Bank's (ECB) decisions to raise interest rates to curb inflation continue to transform the real estate landscape. This financial strategy has a direct and severe impact on citizens' ability to access housing in Spain.

1. More expensive mortgages and reduced borrowing capacity.

The increase in official interest rates triggers an automatic rise in the Euribor, the benchmark index for most variable-rate mortgages. This translates into:

• Higher monthly payments: Families with variable-rate mortgages experience significant increases in their monthly payments.

• Tougher fixed-rate loans: Banks have raised the interest rates on new fixed-rate mortgages, making them less attractive or accessible.

• Reduced purchasing power: As credit becomes more expensive, buyers' real budgets decrease, forcing them to look for cheaper options or postpone their purchase decision.

2. The "Wall" of Financing and Banking Criteria.

Financial institutions have become much stricter when granting loans. They now scrutinize applicants' creditworthiness to avoid the risk of default. The most affected group is young people and first-time homebuyers, who, in addition to facing higher interest rates, rarely have the required down payment (generally 20% of the property value plus 10% for associated expenses).

3. Forced Shift to the Rental Market.

With access to home purchases through mortgages blocked, a large part of the demand inevitably shifts to the rental market. This shift increases the pressure on an already scarce rental stock, pushing rental prices upward and further straining household budgets.