Spain’s Youth Council (El Consejo de la Juventud) says young buyers have to spend 60% of salary on monthly mortgage payments.
Young first-time buyers in Spain need to earn 2,485 Euros a month (30,000 Euros per annum) to afford buying a home without resorting to excessive borrowing, says the latest bulletin from the Spanish Youth Council (El Consejo de la Juventud). The problem is that most young Spanish adults earns just half that, so the choice for them is excessive borrowing or living at home with their parents.
The situation is even worse in regions where housing is much more expensive than the national average, whilst the salaries earned by young adults are similar to the average. The difference between what young adults need to earn to buy a home, and what they do earn is most acute in The Basque Country (148%), followed by Madrid (140%), and The Balearics (134%). On the other hand the difference is lower, and housing more affordable for young adults, in Extremadura (22%), followed by Castilla-La Mancha (39%), and Castilla y Leon (53%).
Despite falling property prices, and interest rates at all time lows, young first-time buyers still need to spend 60% of their monthly salary on mortgage payments, say Spain’s Youth Council.
By region, the percentage rises to 77% in The Basque Country, followed by 74% in Barcelona, 72% in Madrid, 70% in The Balearics, and 63% in Malaga. Experts recommend a ratio of no more than 33%.
The bulletin also reveals that more than half of all young Spanish adults cannot afford to leave home and still live with their parents.
A housing market that is awash with unsold new property yet shuts out more than half of young adults is totally unsustainable, especially in a country like Spain where the population pyramid is increasingly top heavy.