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Spanish first time buyers have to part with 86pc of income

Thanks to high property prices and miserable salaries, buying a home has been prohibitively expensive for Spanish first time buyers for the best part of the last decade. Now that the Spanish property boom has turned to bust, and house prices are coming down, you would think that buying a home is becoming a lot more affordable for first time buyers.

Well, you’d be wrong. Housing affordability has improved a bit, but buyers in the 18 to 34 age group still have to spend on average 86% of their annual income to finance the purchase of a home, according to the Observatorio Joven de Vivienda, a body that monitors housing accessibility for young people. Lower interest rates and property prices have only improved affordability for young people by 2% since the last quarter of 2008.

So, even taking into account the small improvement in affordability, young people living in Spain still need to earn triple the average salary for their age group if they are to afford a home without taking on an unreasonable level of debt, says the Observatorio Joven de Vivienda.