Young adults under 30 living in Spain need to earn more than twice their average salaries to get on the housing ladder, according to new research by the Youth Council of Spain.
Salaries have to rise, or house prices have to fall if young Spanish adults are to have any chance of flying the nest as owner-occupiers. Given the average salary for under-thirties in Spain, and the average cost of housing after seven years of declines, young adults still need to earn 86 per cent more than they do to get on the housing ladder, all according to the Youth Council’s research and assumptions.
Using data from the last quarter of 2013, the Youth Council found that young adults have to spend 56 per cent of their salary on purchase costs to afford a property of just 54m2.
With youth unemployment above 50 per cent, and such a disparity between salaries and housing costs, only one in four young adults in Spain have managed to leave home. The rest are still living with their parents.
Amongst the under-thirties who do have jobs, 53 per cent are over-qualified for the job they have, and half are on temporary contracts that don’t provide the security needed to make longer term financial commitments like taking on a mortgage.
Part time jobs are the norm for 28 per cent of young adults, even more so for those between 16 and 24 years old, and young women in particular.
These findings illustrate “the dramatic situation that unemployed young Spaniards are living through, and demonstrate that precariousness and exploitation are the predominant features of the employment conditions of the young who are in work, painting an uncertain future devoid of hope,” says Ricardo Ibarra, President of the Council.
High youth unemployment has negative implications for the long-term health of the Spanish property market in primary residential areas, but less so for the holiday-home market on the coast, where demand is highly diversified and driven by older foreign buyers.