Rising Housing Prices and Stagnant Incomes
Spain continues to face a growing housing crisis as both rental and property purchase prices rise faster than wages. According to Matilde Cuena Casas, professor of civil law at the Complutense University of Madrid, insufficient pay is a key obstacle to resolving the housing crisis. Even with efforts to lower the cost per square meter, many families and young professionals are unable to afford a home of their own due to low salaries.
In major cities like Madrid and Barcelona, rent can consume up to 70% of a family’s budget. This puts added pressure on households and limits opportunities to save or invest. Analysts note that nationwide, rent takes up an average of 36% of a family’s income, while in some regions this figure is significantly higher. The real estate purchase situation is not much better: in several cities, mortgage payments exceed the expert-recommended 30% threshold.
Impact on Youth and Demographics
The struggle to access housing is directly affecting Spain’s social fabric. Young people are forced to live with their parents for longer, leading to reduced independence and delayed family formation. According to data from the second half of 2024, only 15.2% of Spaniards under 30 have managed to move out — the lowest level in recent years.
At the same time, Spain is experiencing a historically low birth rate. In 2023, there were only 6.61 newborns per thousand inhabitants — an all-time low since records began in 1975. Since 2008, the number of births in Spain has declined by 38%, the third-fastest drop in the European Union after Latvia and Greece. Meanwhile, some European countries such as Germany and Luxembourg have seen their birth rates rise.
Legal risks and market instability
Experts emphasize that, beyond economic issues, legal instability is another major factor. In recent years, the real estate market has faced constant regulatory changes, creating an ongoing sense of uncertainty for both property owners and tenants. Among the most debated measures are the extension of eviction moratoriums for unpaid rent and the introduction of rent caps in high-demand areas.
Analysts note that such measures disrupt the balance between the interests of homeowners and tenants and hinder market development. The shortage of supply, lack of social housing, and absence of long-term legal stability only make matters worse. As a result, many investors are choosing to stay away from residential real estate, further limiting access to housing for the general population.
Outlook and challenges
The housing market situation in Spain requires a comprehensive approach. Economists and legal experts agree that without higher wages and a stronger legal framework, sustainable improvement will be impossible. Otherwise, they warn, the country could face further declines in birth rates and rising social tensions. Housing affordability remains one of the main challenges Spanish society will face in the coming years.
