The price of housing increases by 43 points more than the average income

The accounts are simple. Since 1991, GDP per capita (average wealth per person) has increased by 120.6%going from 14,411.9 euros at the beginning of the 90s to 32,676.98 euros Last 2023. This is intense growth, but it has been far outpaced by the cost of living.

So, in the same period of time, inflation was 139.6%which generally results in a loss of purchasing power. For its part, the average price of sales of new and used housing jumped by 163.8%, while the cost of rent increased by 182.1%.

The result is discouraging, because it shows a reduction in purchasing capacity very accented Spanish. This loss of purchasing power – GDP per capita growth minus inflation – reaches 19 percentage pointsso that the increase in average wealth has not served to improve the quality of life, at least in terms of material conditions.

But problems arise when we compare the increase in average wealth with that of real estate market prices. This is where the great generation gap appears which limits the emancipation of young Spaniards. The Spanish lost 43.3 percentage points of purchasing power for a housesince it is the differential between the increase in GDP and the average selling price.

And the rent situation is even worse, because the gap reaches 61.5 points percentages. In this case, the issue becomes even more serious because, for young people, this modality is precisely the gateway to the housing market.

This intense price increase only reduce household disposable incomeputting barriers to the savings needed to take the step toward buying a home.

GDP per capita is not directly linked to the average salary, it is even a little higher, but it allows a homogeneous historical comparison. Last year, the gap between this variable and the average gross salary was around 6,000 euros, and the median – the most common – falls even further.

In this sense, it should be emphasized that the salaries of younger people tend to be lower than those of workers. senior and what’s more, they have less job security. A cocktail of precariousness that ruins their expectations for the future.

The rental circle

The big problem young people face when buying a first home – and leaving the rental market, which at the end of the month costs far more than paying a mortgage – is known as vicious circle of the rent.

The fact that rents demanded by landlords have increased much faster than wages in recent years has caused I couldn’t save enough to pay the down payment on a house.

In other words, they have not managed to accumulate enough balance in their account to pay the 20% which, as a general rule, is necessary to access bank financing.

According to data provided by Idealista, in January 2006, a 70 square meter house was rented in Spain for around 700 euros. In 2024, the total to be paid each month is more than 900 euros. The range is even wider in larger markets, such as Madrid and Barcelona.

In the Spanish capital, of the 980 euros paid for 70 meters in 2007, It rose to 1,400 euros. In Barcelona, ​​which is currently the most expensive place to rent a house in Spain, it goes from 882 euros to 1,344 euros.

If we travel back to 1991, the differences continue to widen. In Barcelona, ​​according to data still kept by the town hall, the average price per square meter on that date was 1,025 pesetas, or around 6.1 euros. That is to say that the 70 meters would then have cost 427 euros. A price which, given the current situation, is impossible to find on any real estate portal.

One of the main consequences of this situation is the low rate of emancipation that exists in Spain. Young people, as a general rule, resort to renting to get out of their parental home, and this is not always easy. This increase in prices, among other things, causes the emancipation of only 16.3% of young Spaniards, one of the lowest rates in Europe.

The average age of emancipation is 30.3 years. For those who succeed, the prospects are not very promising either. According to the Youth Council in Spain, young Spaniards end up with around 60 euros in their account once they have paid their rent.

And those who bought?

Although housing purchase prices in most of Spain remain below 2008 levels, the situation It’s not entirely comfortable either.. It is true that Spaniards who buy a house are now spending fewer years of their salary on paying for their property in full than in the months before the bubble burst, but this figure is still a long way from 1991 levels.

At that time, with 4.3 years of salary paid for a house standard size, as detailed by the Bank of Spain. Since then, the effort to buy property has continued to grow until the bubble burst, when it reached its ceiling, reaching 9.45 years of salary, almost double what it was. had before.

“The greatest effort to buy a house took place just before the bursting of the real estate bubble which gave rise to the 2008 crisis: we are talking about September 2007 (9.45 years on average); of June 2007 (9.37 years) and December of the same year (9.32 years),” explains Bankinter.

This figure has since moderated, although this is not due to rising wages, but rather to falling property prices. Currently, the Spaniards allocate 7.3 years of your salary to pay for a house you own. However, this time frame varies considerably depending on the region.

For example, in the Balearic Islands the historic maximum was reached in the first quarter of 2024. In this sense, a Balearic citizen must devote 20 years of their salary to the acquisition of housing. In fact, the island territory is the only autonomous community in Spain more than 10 years old. Madrid (9.3 years) and Catalonia (8.3 years), second and third respectively, are barely close.

“Globalization and the increase in air destinations have increased the demand for purchasing homes in Spain. Spain is a country with a level of legal and health security and first-rate infrastructure. This means that the barriers to “The purchase of housing has been lowered and the mass of buyers has increased, while there is less and less permanent land, all of which leads to price increases,” he explains. Alfredo MillaCEO of Sonneil at EL ESPAÑOL-Invertia.

And the grandparents?

Data on the price of homes for sale does not extend beyond the 1980s, but there is evidence of both average income and changes in inflation and the price of homes for rent. And the data shows that young people are better off than their grandparents at his age. With the figures from the 1960s, more than 2,600 purchasing power points and more than 3,800 rental capacities.

If we move forward another decade, the situation remains the same, although the improvement is not as pronounced. Thus, a slight loss of two points of purchasing powerwhile rental capacity has improved to over 600 points.

In fact, there is a historical explanation. The generation of young people’s grandparents, who experienced the Transition intensely, were very mobilized. The decade of the 1960s and 1970s was that of an effervescent workers’ movement which, although very attached to the demands of freedom and democracy, also fought for material conditions of workers.

This has resulted, in the most immediate future, in a improvement of living conditions which the generation immediately after appreciated; that is to say their children, the parents of today’s youth. However, the dynamism of the union movement waned over the years and the demand for better jobs and wages faded, with the consequences we can see today.