Rising rents and speculation fuel housing rights protests

Rents have increased by 30%. The price per square meter is close to that of the real estate bubble. And the increase in wages does not reach either one or the other or inflation. Only a third of young people can emancipate themselves before the age of 35, when in reality, the term “young people” gives the impression that the problem does not really resemble them. Nearly 1.3 million households devote more than one euro in three of their salary to financing their roof, an effort that international organizations consider “excessive”. Meanwhile, the rent of landlords, when they are not a vulture fund, doubles that of tenants.

With these figures, the movements for decent and affordable housing will demonstrate this Sunday in Madrid, in a mobilization that they anticipate will be massive, and in Barcelona, ​​and the mobilizations will be repeated in the coming weeks in other cities. With the demand for a drop in prices and the call for a rent strike as leitmotifassistance in a country of landowners can define the course of social organizations, which hope that this day will represent a before and after in terms of public policies.

We explain in 10 graphics the nine problems underlying the housing crisis in Spain.

Rents increase by up to 30%

Between 2015 and 2022, rent prices increased by an average of 30% in Spanish metropolitan areas. Even though the focus is generally on big cities, like Barcelona or Madrid, no one is spared. In Valencia, it has increased by 43% in less than a decade. In the Balearics, 40%. In Malaga, 39%. And in Toledo, 35%. According to the analysis of block-by-block rental data from the National Reference System for Housing Rental Prices, carried out by elDiario.es, the trend affects both large and small towns and the most expensive areas, but also the cheapest.

Several factors influence the increase in rental prices. One of them is the growth in demand for rentals, after an exodus of the population towards metropolitan areas where it is easier to find a job, which combines with the difficulties of access to property, which increases the tenant pool. But the rise of tourist residences, extracted from the available park for residential purposes or for the extraction of vulture funds, also has an influence.

The purchase price is close to that of the bubble

When the real estate bubble burst in 2008, housing prices, around 2,000 euros per square meter, began to fall. They did this until 2013, when they increased again.

In most territories, these levels have not yet been reached and the national average remains 10 points lower, but some voices have been warning for some time about the repetition of certain trends. In the Balearic Islands and Madrid, buying a house today costs more than then and other communities, such as the Canary Islands, Navarra or Catalonia, are getting closer to the line drawn by the graph, according to the average estimated value of the vacant house.

“Buying and selling, for the majority of the population, is increasingly impossible, due to the price situation in large cities, the employment situation and the conditions of mortgage loans,” explains Melissa García, Doctor of Geography from the University of Manchester, in an article. in the latest elDiario.es magazine, “Housing, errors of failure announced”. “Housing is considered an investment asset, it arouses a lot of interest and it has a more speculative value than a house intended for daily use,” he warned.

The rise in wages, at the tail end

Housing purchase prices, rents, inflation and wages are increasing. But these are in the queue. Between 2015 and 2022, wages increased by 17%, but even with this increase, the working class lost purchasing power, as inflation has since risen by more than 20%. With more income, they can buy less and have less savings capacity, while a greater share of the wage bill is spent on housing.

As the chart shows, the rental price increased by 10 points above wages and the average sales value increased by another 18 points.

1 in 3 tenants spend more than 30% on rent

Both the OECD and the European Commission recommend spending no more than 30% of your salary on housing, to make ends meet without difficulty. This is a maxim adopted by the National Housing Law, but one that almost 1.3 million households in Spain cannot afford, according to microdata from the Survey on Living Conditions of the National Institute of Statistics. There are 120,000 more families than in 2015. And, as the following graph shows, this particularly affects young people, those who live alone and single-parent households.

37% of people under 30 living alone spend more than 30% of their income on rent. 16% of adults aged 30 to 64 spend more than a third of their income on rental. For adults living as a couple, the percentage of those drowning in prices is reduced by half. Among households made up of a couple over 65, the proportion of those who make excessive effort drops to 2%.

Landlords double tenants’ rent

Having or not having housing configures income levels. In fact, the average net income per household of households earning more than 200 euros per month in rent doubles that of tenants, with 4,395 euros compared to 2,252 euros, according to the analysis of microdata from the Living Conditions Survey. This media identified as owners households who receive more than 200 euros per month for renting a property. The figures show that the relationship is exponential: the higher the rent, the higher the rental income.

The data draws two more inverse graphs, showing the rent gap that divides homeowners and renters. If we analyze wealth per household, 27% of people belonging to the poorest decile are renters, compared to 2.4% of owners. At the other end of the scale, the situation is reversed: only 7% of the most advantaged deciles live on annuities, compared to 26.1% of annuitants.

Only a third of the population can be emancipated before the age of 35.

This Sunday’s demonstration focuses on the fact that housing is not a business, on rent prices and on a group particularly penalized by this crisis: young people. According to the latest study by the Emancipation Observatory, the average age for creating independent housing in Spain is 30.4 years, the highest since records began and far from the 26.3 years in Europe. Currently, only 38% of young people between 20 and 34 live emancipated, according to data from the latest Labor Force Survey.

According to data from the National Youth Council of Spain, a young person with an average salary would not be able to rent accommodation on their own, even if they spend their entire salary on it. This situation has an impact on those who cannot emancipate themselves, but also on the conditions of those who do. “It is not because a person lives outside the family home that they benefit from good conditions,” explained the president of the entity, Andrea Henry.

Double the effort to buy a house than 30 years ago

An increase in the sale price of housing out of step with the increase in wages has a direct impact on the effort that the population must make to buy housing. According to a recent report from the Barcelona Urban Research Institute (IDRA), seven out of ten tenants do not know if they will be able to buy an apartment at some point in their lives. The Bank of Spain has estimated that a typical household would have to spend more than seven full years of their income on the free acquisition of a 94 square meter home, the usual size.

This bank supervisor indicator has maintained some stability over the past decade, after soaring in the years before the Great Recession and falling with the bursting of the previous bubble. However, it has never returned to the levels before 2003. If we analyze from a generational point of view, a person aged 30 – the average age of emancipation in Spain – will have to work almost twice as long to pay for your accommodation. .who bought it when it was born.

Tourist rentals drive out neighbors

The increase in the number of tourist accommodations has put a strain on the residential market. If they are intended for visitors, they cannot be occupied by neighbors. Thus, they now represent more than 4% of the total stock of the Balearic and Canary Islands and the province of Girona; 3.9% in Malaga, 2.9 in Cádiz and 2.8% in Alicante. And the situation is getting worse in some island municipalities, where it is assumed 20% of the total.

The example of the four most populous cities in the country illustrates how accommodation for tourist use is concentrated in the center and their presence diminishes the further they move away. These concentric zones also explain the expulsion of part of its inhabitants towards increasingly distant areas which, in turn, push out the rest. The Ministries of Housing and Tourism are working on regulations for this type of housing, which have escaped state law, while some municipalities are advancing their own policies. Barcelona Mayor Jaume Collboni announced in June that he would not renew the city’s 10,101 licenses.

Real estate sector profits soar by more than 50%

The increased effort of households to cope with rising prices is not in vain. Since 2015, profits from the real estate business, excluding construction, have skyrocketed by 52%. The increase in intermediaries’ profits fell with the pandemic, but since 2021, profits have doubled. And they did this despite the fact that sales by no means increased to the same extent. As the following graph shows, the two curves were equal until 2019. Today, the difference is 34 points.

The graph also shows how the sector is getting richer without creating jobs. Intermediaries have seen their profits increase virtually without increasing the number of employees, which has increased by only 2% over the past nine years.