Cities in Spain where most of the wages of citizens go to pay for housing

Cities in Spain where most of the wages of citizens go to pay for housing

The increase in the Euribor rate, together with the rise in prices in the residential real estate market, puts pressure on many families in Spain, forcing them to make more and sometimes excessive financial efforts to pay off mortgages for their housing or rent.

According to data from a Eurostat study, in 2022, Spanish households, on average, spent 18.2% of their total income on housing payments. Such an indicator has not been recorded since 2017, which puts Spain in eighth place among the countries of the European Union in terms of the highest expenditure in this area.

At the same time, the situation is even more severe for families and citizens who are on the poverty line or at risk of poverty. They spent 39.8% of their income on payments for the housing in which they live. It has long been known that experts recommend not to exceed the threshold of 30% of monthly income.

At the moment, the Spanish residential real estate market shows no signs of weakening in the short term. In the report of the Idealista real estate portal for November 2022, it was estimated that by the end of the year, the growth in housing prices will reach 5.4%, and rental rates will rise to 7.3%.

Exact data has yet to be obtained, but it is already known that only a few provinces managed to avoid a rise in price in the housing market. According to rental rates, the regions of Huesca and Cordoba should be noted, and according to purchase prices — Burgos, Zamora, Huesca, Ciudad Real, Cuenca, Caceres and Jaen.

Excessive rents and mortgage payments primarily affect the population living in the cities of Spain. Exact data are known on the situation in 2021. Then 11.4% of Spaniards living in cities had to spend more than 40% of their income on housing. In rural areas, the number of people with such expenses was only 5.3%.

Barcelona and Madrid are the largest Spanish cities and rental payments in them occupy the largest share of household income when compared with other cities in Spain. According to Idealista, tenants in Barcelona can spend up to 58% of their total income, and in Madrid — up to 42%.

There are fourteen more provincial capitals of Spain nearby. San Sebastian, Valencia, Bilbao, Vitoria and Malaga attract special attention here. Families living in rented housing in these cities spend more than 30% of their income on rent.

It is also becoming increasingly difficult to buy real estate. The growth of the required amount of mortgage funds occurs monthly and Spanish households in such cities, already in the third quarter of 2022, had to spend, on average, 23.5% of their income. A year earlier, this figure was at the level of 20.1%.

Rising market prices, outstripping wage growth, also means that more and more people have to save longer to buy their own homes, both if they are ready to take out a mortgage, and in cases where they plan to rely only on their own strength. To buy a house with an area of 100 square meters in Spain today, for an average household, it will take 11.1 years to accumulate a full salary without deducting other expenses. In the early 00s, this figure was 8.2 years.

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