Recent reports by the Bank of Spain and the country’s National Statistics Agency (INE) have shed light on the increasing cost of living in the country, in particularly Spain’s wild rent hikes.
Whereas Spaniards earn only 1.6 percent more in wages than they did five years ago (€23,646 a year on average in 2018) they’re paying twice as much in rent than they did in 2013.
That has obviously spelled bad news for many tenants in Spain, 42 percent of whom spend 40 percent of their monthly wages on rent (Eurostat figures).
The Bank of Spain has highlighted that it also tends to be families with fewer financial means who have to resort to renting in Spain.
Unemployment and low wages are among the leading causes preventing them from being able to take out a mortgage when buying a property, even though property prices in the past five years have increased at a far slower price than rents – 6.8 percent compared to 50 percent.
Unsurprisingly, unpaid rent is also the leading cause of evictions in Spain.
Spain’s skyrocketing rent prices may also explain why the country remains a nation of homeowners (80 percent according to Eurostat, the highest in Western Europe), a rate which includes young adults who live at home with their parents as they are unable to afford renting their own place.
Despite a royal decree approved last March which was aimed at putting a stop to the spiraling “alquileres”, Spanish estate agencies are warning that the lack of rental properties on offer is only serving to make the situation worse.
In which Spanish cities have rental prices gone up the most?
Majorca’s capital Palma and Barcelona have seen the sharpest rise in average rent prices, with homes in both cities now costing more than 50 percent more than five years ago.
They’re followed by the southern city of Malaga, the Spanish capital Madrid, Las Palmas de Gran Canaria and Valencia, all cities where properties are roughly 45 percent more expensive to rent than in 2013.
Santa Cruz de Tenerife in the Canary Islands has also seen a rise of 40 percent in rent prices in just five years.