Social housing more expensive than private property

When private property is cheaper than social housing you know that something is wrong. That appears to be the case in parts of Catalonia like Barcelona, where private property is now often cheaper than social housing, reports the Spanish daily El Pais.

Thanks to a property market crash that has driven prices on the open market down by 20% or more, subsidised housing in the Barcelona region can now be found up to 20% more expensive than private property sold by developers. In parts of Lleida and the Ebro region, the difference is 10% to 30%.

The Environment and Housing Department of the regional government will only admit that there has been a “narrowing” in prices, and says it plans to reduce the cost by selling land for price controlled housing projects cheaper to developers.

Price controlled homes are supposed to make housing more affordable for lower income groups (decent housing is a constitutionally guaranteed right in Spain). In theory social housing should cost around 75% of property on the free market. But the property market crash has driven down new build prices by 20% or more, wiping out the differential.

In at least 36 of the 53 biggest municipalities in Barcelona province, social housing is now more expensive than buying on the open market. In some cases, like the municipality of Molins de Rei, price controlled housing is almost 20% more expensive. The same is true of municipalities in cities like Terrassa, Sabadell, Lleida, Tarragona and Girona.

Given the restrictions on social housing, such as the price owners can ask when they sell, it makes no sense to buy if it costs the same as property on the open market, let alone if it is more expensive.

A trade union spokesman for housing points out that, given today’s house prices and credit restrictions, a family with a household income of 64,000 Euros, well above the average, would struggle to afford any property in Barcelona.



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About Mark Stücklin

Mark Stücklin is a Barcelona-based property market analyst and consultant, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008). He can be reached by email on