Housing in Spain has reached prohibitive prices. How much does a family have to work to buy a house
Real estate in Bilbao Photo: kon rad / Alamy / Profimedia
Families in Spain need, on average, 7.7 years of gross salary to buy a house, the biggest financial effort since 2011, a new proof of the current real estate crisis caused by the fact that the demand far exceeds the supply but also by other factors, which have led to the increase in prices, including on the rental market, informs EFE, taken over by Agerpres.
According to data from the Bank of Spain for the third quarter, in the first year after purchasing a home, Spanish households allocate over 34% of their gross income to this.
Starting from June 2020, the financial effort required to purchase a house remained above the 7-year threshold. This creates a difficult situation for young people, especially for those who want to move out of their parents' homes, but also for the most disadvantaged segments of the population.
In the third quarter of the year, the price of private housing accelerated its growth to 12.1% compared to the previous year, reaching 2,153.4 euros per square meter of built surface, the highest price recorded since the beginning of the collection of statistical data by the Ministry of Housing, in 1995.
With this new two-digit increase, the previous peak was surpassed, reached in the first quarter of 2008, just before the explosion of the great real estate bubble of that time, when the price per square meter rose to 2,101.4 euros.
However, the effort required to purchase a home – measured in years of income – which has been rising for five consecutive quarters, is now lower than during that housing bubble. Back then, in mid-2007, families needed up to 9.5 years of gross salary to buy a home.
Also, sixteen years ago, in 2008, home buyers needed 54.7% of their income in the first year. Comparatively, between 1990 and 1991, over 72% of the annual disposable income of an average household was required.
