Inflation is at a high level in Spain, and this is having a significant impact on the real estate market. On the one hand, it is making it difficult for families to save money to buy a home. But on the other hand, it is creating an opportunity to improve the energy efficiency of housing.

Specifically, inflation in Spain stood at 10.2% in June 2023, according to the National Statistics Institute (INE). This means that the cost of living has risen by 10.2% compared to the same month of the previous year. Mortgages indexed to Euribor are linked to inflation. This means that when inflation rises, so does the Euribor, and this leads to higher mortgage repayments.

Over the past five years, the house prices have risen by 20%and this rate of growth is being driven by rising construction costs and investor demand for housing. Inflation is having a significant impact on families thinking about buying a home. On the one hand, it is making it more difficult for them to save money for the down payment. On the other hand, it is making it more difficult for them to meet their mortgage repayments.

However, inflation also is creating an opportunity to improve the energy efficiency of housing. By reducing energy consumption, households can save money on their energy bills and, at the same time, reduce their environmental impact.

There are a number of measures that households can take to improve the energy efficiency of their homes, such as:

• Installation of insulation in walls, roof and windows.
• Installation of efficient air-conditioning systems.
• Use of energy-saving appliances.
• Maintenance of the house in good condition.

These measures can help families save up to 30% on their energy bills. They can also contribute to reducing greenhouse gas emissions, which helps to combat climate change.

To mitigate the impact of inflation on the purchase of a home, families can consider the following recommendations:

• Find out about the property market and financing conditions.
• Compare different mortgage options before making a decision.
• Consider buying a smaller house or in a less expensive area.
• Save as much money as you can before buying a home.

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