The world upside down – Diary of Change num.108

No. 108 the world upside down

Following the thread of a successful series that ended just a few weeks ago, there are moments when, observing how the residential market works, you get the feeling that something deep doesn’t add up, as if everything were working in reverse. Not because the problem is unknown—we’ve been talking about it for years—but because the reactions of the different actors are increasingly far from what would reasonably be expected. And when everyone ends up doing the opposite of what they would like to do, perhaps the problem is not with people, but with the framework in which they operate, which pushes them to make decisions that are not natural.

 

The current pressure on the housing market in metropolitan areas is not the result of a single cause. We have said it many times: in short, it is the consequence of the lack of a country model and, above all, of a public decision-making model that has long failed to keep pace with reality. Population concentration, attraction of talent, international mobility, increasingly smaller households, longer life expectancy… all of this structurally increases housing demand. It is not cyclical, it is not temporary, and it cannot be fixed with stopgap measures.

 

Added to this sustained pressure is a chronic absence: the lack of public investment in housing, especially in affordable rental and purchase stock. We have been carrying a deficit for decades that places us far from European standards. And when public supply does not exist or is purely marginal, all the weight falls on the private market, which, paradoxically, is increasingly burdened with more limits, more uncertainty, and more obstacles.

 

The result is a system stretched to the limit. And in this context, something curious—or worrying—happens: no one does what they would like to do.

 

Owners who have one or several homes in the long-term rental market would like to rent them out with peace of mind, with clear rules and the assurance that, if things go wrong, the system will protect them. But when the perception is one of legal insecurity, when regulatory changes are constant and unpredictable, the rational decision stops being to rent and becomes to sell. Not because it is the desired option, but because it is the least risky one.

 

Many tenants who currently live in a home would not want to buy either. They want stability and continuity, but they too often see that when the contract ends, owners put the property up for sale. They also know that finding another rental will be even harder. And so they end up seeking security in buying, even if it was not their first choice.

 

Those trying to access a home for the first time do not aspire to buy at any price or under any conditions. Many would prefer to start with renting, to gain time, flexibility, and room to live. But when the rental supply is scarce or practically nonexistent, the purchase market becomes the only entry point, with the financial effort this entails and which is often only possible with family support.

 

People who come for a temporary stay—for work, studies, or specific projects—do not want to occupy homes intended for permanent residence, because they are looking for different features and services. With the regulatory changes approved just a few days ago, these homes will disappear. The result is that these people will end up competing for the same housing stock that should be used for year-round living, further straining the system.

 

And developers? They do not want to leave either. They would like to invest, build, expand supply, and be part of the solution. But when the regulatory framework is unstable, when timelines are endlessly delayed, and legal certainty is weak, investment shifts elsewhere. It does not disappear; it goes to other territories where the rules of the game are clearer.

 

The final result is this upside-down world:

• Owners selling when they would prefer to rent.
• Tenants buying for security.
• Buyers forced to enter the market too early.
• Tenants living in homes that do not meet their needs.
• Investment leaving when it is needed most.

 

It is legitimate to ask: is this what we want? Do we want a system that generates defensive decisions instead of natural ones?

 

Perhaps the time has come to stop piling on regulations without a global vision and start building a stable, measurable, and coherent framework that understands market dynamics and places public housing at the center—not to replace the market, but to balance it.

 

Because when no one does what they want to do, the problem is not individual. It is structural. And ignoring it only leads us, once again, to turn the world upside down.

Guifré Homedes | Director General Amat

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The Diary of change is an initiative by Amat that emerged in response to the financial crisis that erupted in the summer of 2008 and had a major impact on the real estate market. In that moment of uncertainty, Amat felt the need and conviction to inform its clients, collaborators, and contacts about the events and changes taking place and affecting everyone.