Renting a house takes 60% of the salary in Ibiza and the rest of the Balearic Islands

Experts point out that it will be necessary to wait and see how the new Housing Law approved this week in the Congress of Deputies will impact the sector

But if you opt for renting, the sacrifice is even greater, 43%, the highest figure in the last decade, according to data handled by the real estate portal Fotocasa and the employment platform InfoJobs. A percentage that even exceeded 50% in the Balearic Islands, Catalonia, Madrid and the Basque Country.

With these data, the salary effort that citizens have to make to access a home is well above what is recommended by the control agencies, which consider that no more than 30% of income should be allocated to the payment of the house.

Housing in Ibiza: more than 17 years of economic effort to acquire a home in Santa Eulària

According to the Bank of Spain in the fourth quarter of 2022 were necessary more than 7.8 years of gross salary, practically similar to the previous quarter, when with 7.9 years was recorded the highest figure since 2011. In addition, 36.1% of annual disposable income was needed to pay the first year’s installments, the highest since 2012.

These figures are, however, below the peak reached in the third quarter of 2007, before the bubble burst, when it took almost 9.5 years of gross salary to purchase a standard home financed with a standard loan for 80% of its value.

The minimum, in 1987

On the other hand, the minimum -2.96 years- occurred in the first three months of 1987, the year from which the Bank of Spain has records of this indicator.

Since the entity has quarterly records, the greatest effort was visible in 1990 with more than 72 % of income in the first year. It should also be noted that in mid-2008, in the midst of the real estate crisis, it reached 54.6 %, while the minimum was recorded in mid-1999, with 25.3 %.

For their part, Fotocasa and InfoJobs calculate that Spaniards spent an average of 6.7 years (81 months) of their gross salary to pay the mortgage of their home purchased in 2022 and conclude that we are facing the greatest salary effort that citizens have made due to the historical increase in housing prices.

The average price of second-hand housing in Santa Eulària exceeds that of Ibiza

More effort for renting

Although both web portals put at 43% on average the gross salary that citizens have to allocate to the payment of the rent of a house in 2022, the highest figure of the last decade, this percentage exceeded 50% in some communities and even to touch 60%.

According to data from Fotocasa, the price of rental housing in Spain closed 2022 with an annual increase of 7.4 % to stand in December at 11.03 euros/m2 per month. For its part, the average gross salary recorded by InfoJobs last year was 24,395 euros (2,033 euros gross per month in 12 payments).

Housing in Ibiza: The Govern will buy old hotels in Sant Antoni to convert them into apartments

By autonomous communities, the highest percentage of salary to pay rent for housing was recorded in the Balearic Islands (58 % of gross salary); Catalonia (58 %); Madrid (57 %); Basque Country (52 %); Canary Islands (49 %) or Cantabria (43 %).

And the fact is that in addition to the fact that wages are not growing at the same rate as housing, the price of rents is at an all-time high, showing the highest increases in the last 17 years.

As housing prices grow, although a moderation is already being observed and some sources are even detect slight declines, and financing becomes more expensive as interest rates rise in response to inflation, experts agree that the effort that families will need to make to afford a home may be even greater.

In addition, we will have to wait to see how the new Housing Law approved this week in the Congress of Deputies will impact the sector.