The housing market in Spain has become increasingly unaffordable for young people, with property and rental prices rising significantly faster than their salaries. Since 2015, property prices have surged by 47%, and rents by 58%, far outpacing the modest wage growth for those under 35, which has only kept up with inflation.
This growing gap between income and housing costs is making it extremely difficult for young Spaniards to afford housing, either to buy or rent.
Regional disparities add to the crisis
The situation is particularly dire in regions with large populations and high tourism levels, such as Madrid, Catalonia, and the Balearic Islands. These areas have seen the steepest increases in housing costs, forcing many young people to either continue living with their parents or share cramped rental spaces. Large cities offer more job opportunities and education, making them a magnet for young people, but the high cost of living makes it challenging to settle down.
Generational wealth gap widens
The growing disparity in wealth between younger and older generations is stark. Those who already own property have seen their wealth grow as housing prices rise, while younger people, with precarious jobs and less savings, are left behind. Data from the Bank of Spain highlights that the wealth gap between younger and older generations has multiplied ninefold in the last 20 years.
Social and economic impacts
The housing crisis has broader implications for Spanish society, threatening long-term economic growth and social cohesion. Experts warn that if young people cannot afford to buy homes, the growing divide between property owners and renters could become entrenched, deepening economic inequality. Addressing the housing affordability issue is crucial for ensuring equal opportunities for future generations and avoiding a growing social divide in Spain.
Also read: The three Spanish provinces where house prices will rise the most in 2024