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Housing Affordability Crisis in Spain: People Aged 34 Or Less Would Need to Earn Twice More to Afford Buying a Home

Getting on the housing ladder has never been easy, but according to recent research it is harder than ever for young Spanish people to afford a place of their own, whether to buy or rent.

A study from the Emancipation Observatory of the Spanish Youth Council reports that at the end of 2019 only 18% of young people between the ages of 16 and 29 no longer live with their parents. In other words, young Spanish people would need to earn €1,935 euros per month, so that the monthly mortgage cost doesn’t represent more than 30% of their salary. But on average, they now earn €961, which is only 50% of that required amount.

When it comes to moving out of the family home, the options are to purchase a property or to rent a property, either on your own or with others. A lucky few may be able to rent a home from a family member, but apart from highlighting the gap between the social classes, this relies on the good fortune of having a relative with an available empty home.

Those wishing to buy a property have two key considerations:


• monthly mortgage payments

• original down payment (deposit)


Both are out of reach for so many. The Spanish Youth Council report states that in order to ensure that a maximum of 30% is allocated to mortgage payments, thereby allowing for other expenses to be met, a monthly salary of €1,935.57 is required. This is just over double the current average monthly salary of €961.03.

The Housing Affordability Crisis Explained In Two Steps

Average Monthly Salary VS Mortgage Payments

At current salary levels, young people must allocate 60.4% of their monthly income to mortgage payments, which leaves them unable to meet their other living expenses. Crucially, this percentage is also well above that which banks use to determine the viability of a mortgage, which presents an insurmountable obstacle from the start.

With regards to a deposit, which is generally 20% of the purchase price, the report states that the average deposit required is €47,104.80, which is more than four times the average annual salary. Again, saving up such a sum is realistically unachievable for many without an extraordinary contribution from parents or other unusual sources.


In order to one day realise the dream of owning a property, young Spaniards will need to not only double their salary but also somehow make sure that they put aside enough savings over the next few years for a deposit.

Renting and Flat sharing: The Only Option Available

With the possibility of purchasing their own home out of reach for most, many are turning to another option in order to gain their independence – renting. Young people would need to allocate 90.7% of their salary to rental payments if they wanted to live alone, a percentage that increases in some parts of Spain, such as Catalonia and Madrid, to over 100%, which is of course impossible, so the only option is to share this cost by renting with others. According to the report, the average rent of a room in a shared house is €287.45, approximately 30% of the average salary, leaving enough to cover other expenses. But it still makes saving for a decent home deposit a real challenge.

The report was published before the recent pandemic, which has only served to add uncertainty to the situation. It also highlights the instability of employment amongst young people, stating that in 2019 one in five employed people under the age of 34 was at risk of poverty and social exclusion and 55.4% were in temporary employment.


The pandemic has brought further concerns for those on internships or working without a contract. The report states that many assistance programmes and other sources of aid are inaccessible to young people since they include requirements such as fixed work contracts.


“Whoever is in an extracurricular internship or those working without a contract will not benefit from the ERTE (temporary redundancy),” states Manuel Ramos de la Rosa, President of the Youth Council. “It is also where the job search is complicated.”


The report has caused a major stir on social media channels where many youngsters feel that they are the forgotten generation,


"The reality of young people often goes under the radar” adds Ramos de la Rosa, who is calling for changes that will bring help to young people in their search for a first home to rent or buy.


It seems that only by bringing in major changes will young people be able to be in a position to take their lives to the next stage.