PROPERTY SEARCH
PROPERTY SEARCH
These seven communities spend more on housing each month than the Bank of Spain recommends
The Bank of Spain urges the population not to spend more than 30% of their household income on housing
The rental market in Spain seemingly sees no roof in the market, as November 2024 experiences an increase of 11% compared to this time last year. In the last month alone there has been an increase of 1.5% in rental prices across Spain.
This increase in house prices in recent years throughout Spain has mirrored that of the rest of the western world, where prices are simply becoming unaffordable for people. This problem has therefore led to difficulty for Spanish people to spend 30% or less of their income on housing, as is recomended by the Bank of Spain.
For any home over 50 square metres, it has become increasingly difficult to afford housing for people who earn the median salary or less throughout the whole of Spain. 50 square metres moreover is not appropriate for many people, especially if they have families, and this is where the probelm lies in Spain.
Taking into account that the average salary is 2,246 euros a month when paid in twelve payments before tax is deducted, to allocate only 30% of the income to the rent of a house of 80 square metres, the cost of the monthly fee should be 673.8 euros. Only the communities of Castilla y León (672 euros), La Rioja (656 euros), Murcia (648 euros), Castilla-La Mancha (584 euros) and Extremadura (560 euros) meet this criteria.
These figures however represent the high end of 30%, which the Bank of Spain has recommended to pay for housing. Moreover, if a person’s wage is 1,870 euros a month the figure drops to 559.5 euros for rent, and thus not a single community meets this need for affordable housing of a certain size.
Therefore, to comply with the BdE recommendation in the community with the cheapest average rental price, the salary must be at least approximately 1,870 euros per month. However, with a minimum wage of 1,323 euros pre tax over 12 months, in Spain the housing is seemingly much over priced. The maximum that should be charged in order to accommodate the lowest earners should be 396.90 euros.
For smaller homes of just 50 square metres, the prices also remain unexplainably high in many areas. In the Canary Islands, the average rent for a 50 square metre house is 700 euros per month. In the Basque Country, for 50 square metres, it reaches 710 euros and the list continues all the way up to the capital where 50 square metres reaches 930 euros per month, and up to 1,488 euros for 80 square metres.
In order to meet this monthly payment for an apartment, a person in Madrid would have to earn 3,100 a month to pay for a 50 square metre apartment and 4,960 euros for a 80 square metre apartment.
Only in 11 autonomous communities can the 30% rule be applied for housing 50 square metres or smaller. These communties are: Extremadura, Castilla-La Mancha, Murcia, La Rioja, Castilla y León, Galicia, Aragón, Asturias, Melilla, Navarra and Cantabria.
In a report last October, the Bank of Spain pointed out the situation of significantly greater overexertion in the centres of urban areas, where there has been a large increase in rental prices in the last decade.
Furthermore, the group that has been forced to increase the effort associated with paying the rent the most has been the one with the lowest income, as these households reportedly spend 43.1% on housing in Spain.
These figures have continued to rise over the past few years and wages have only stagnated in Spain. Furthermore, recent reports speak only to people's inability to rent housing, and they do not consider the decline in people owning houses.
As the average age for children to leave their parents home climbs above 30 in Spain, and with the government blaming the holiday apartment lets for rising prices, the future of the housing market for renters and first time buyers looks bleak, as Spain seemingly continues to fail to grasp the problem.
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Image : Murcia Today Archive
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