Mark Stücklin
Spain may be known for its sunshine and siestas, but is it still a cheap place to live? Deutsche Bank’s latest global rankings offer some answers — and a few surprises.
Spain has long enjoyed a reputation as one of Europe’s more affordable places to live, especially compared to pricier neighbours like France, the UK, or the Nordic countries. But according to Deutsche Bank’s Mapping the World’s Prices 2025, that reputation only partly holds up today.
Not cheap, but not expensive either
When it comes to overall cost of living — including everyday expenses like groceries, utilities, transport, and leisure — Spanish cities rank solidly in the middle of the global table. Madrid and Barcelona are noticeably more affordable than global heavyweights like London, New York, Singapore or Zurich, but they are no longer “cheap” in a world context.
For example, food, clothing, and services remain relatively affordable in Spain compared to Northern Europe, but imported goods, branded electronics, and petrol can be more expensive than people expect — largely due to high indirect taxes and weaker economies of scale.
Local salaries limit purchasing power
One reason Spanish cities don’t rank better for cost of living is that prices need to be seen in relation to income. And this is where Spain falls short. Local purchasing power — how far the average salary goes — is lower than in most Western European countries, particularly when rent and fixed costs are taken into account.
So while the prices themselves might look reasonable, Spaniards still feel the pinch because their pay packets don’t stretch as far. Cities like Zurich, Frankfurt, and even Dublin can feel more affordable day-to-day for locals, simply because incomes are much higher.
What’s still good value in Spain?
Despite this, Spain still offers excellent value in certain areas:
- Public transport is cheap, reliable, and widely available.
- Dining out is far more affordable than in Northern Europe or the US.
- Healthcare delivers strong outcomes for a fraction of the price seen in Anglo markets.
- Cultural life, from museums to festivals, remains accessible and often subsidised.
In short, life in Spain may not be globally cheap, but it’s still good value for money, especially for those earning international-level incomes or pensions.
The takeaway
The idea that Spain is a budget-friendly destination is only partly true in 2025. For foreigners arriving with strong currencies or higher salaries, it can still feel like a deal. But for locals, the cost of living bites harder than it once did — not because prices have soared, but because wages haven’t kept up.
