MADRID – The number of households in Spain that spend more than 40% of their income on housing is above the average in Europe. Moreover, this percentage is even twice as high for rental properties specifically.
The European Commission is concerned, in particular for the most vulnerable groups, such as young people, families with children and low-income households.
However, Spain is not doing badly on a macroeconomic level: the figures point to a recovery after the crisis caused by the pandemic and the economic war. In fact, the goal of bringing the budget deficit below 3% by 2024 is unprecedented.
Efforts have been made and that allows the European Commission to give the government a margin to increase spending by 2.6% compared to last year to maintain fiscal adjustment.
EC especially warns against high rents
However, upon closer examination of the data, the situation becomes more worrying. This is recognised by the European Commission in their spring 2023 assessment of the Spanish economy, which warns of high house prices, especially rents.
“Making housing affordable is a concern,” the European Commission states in its report on Spain’s Stability Programme. They use disturbing data about the situation of this fundamental right.
One such data is the amount Spaniards have to spend on housing, which becomes dangerous when it exceeds 40% of the household income. In the EU, 7.5% of households exceed this ratio, while in Spain this percentage rises to 9.9%.
Tenants in particular are having a hard time
Tenants especially are having a hard time, as this percentage is even twice as high. 40.9% of tenants in Spain spend more than 40% of their salary on rent, compared to 21.2% in the European average.
Housing is an important structural problem
This data is consistent with that of the Bank of Spain, which identifies housing as one of the main structural problems of the Spanish economy. They indicate that 50% of households living in rented accommodation are at risk of poverty or social exclusion.
Finding affordable housing is a major challenge
The European Commission therefore, warns Spain that finding affordable housing is a major challenge. This is especially for vulnerable groups such as young people, families with children and people on low incomes. Housing is even among the top ten most important problems for Spaniards, according to a recent poll.
Also read: Affordable rental properties
New housing law
The European Commission has, however, also highlighted that the Spanish government has plans to build 20,000 social rental homes using recovery funds.
In addition, a new national housing law has recently been approved. This law provides rules to regulate rents in high-voltage areas and sets a maximum increase of 3% in 2024. While these are positive developments, the Partido Popular has already announced that it will not apply this law in the regions where they are in power.