Spaniards spend 23.58% of income on housing
On average, Spanish households spend 23.58% of their annual income on paying a mortgage or rent.
The report, compiled by online property portal Pisos.com, is based on the latest Household Budget Survey carried out by the National Statistics Institute (INE).
According to the report, those who rent a property require a larger percentage of their income when compared to those who own a property, leaving them with less money to buy food and pay other expenses. Those who rent require an average of 25.71% of their income, compared to 21.46% of income for those who pay a mortgage.
Five communities registered an average higher than the national figure: In Andalusia the average expenditure for housing costs was 24.76%, in the Balearics the average is 28.84%, while in Valencia the figure is 24.64%. Two communities saw figures above 30%; in Madrid the average is 30.16% while in the Basque Country the average percentage of annual income spent on mortgage or rent payments is 33.06%.
Miguel Angel Alemany, CEO of pisos.com, said that “rent is usually higher than mortgage payments because it takes imputed costs such as the community fees or certain taxes. Hence the larger monthly payment. However, in the case of home ownership, keep in mind that the monthly loan payment does not account for the initial outlay including monies not funded by mortgage, agency and notary fees, etc.”
Higher Spending For Families
Spanish families who live in rented accommodation have a larger average outlay, with 25.71% of annual income required for rent payments. Assuming every household has an average annual income of 27,419.52 euros per year, the average rental contract will require 7,061.65 euros of that income, 612 euros per month. However, owners will shell out 5,899.06 euros (492€/month), saving them 120 euros per month, or 1,162.59 euros per year.
When looking at the percentage in Spain’s regions, the housing costs vary greatly. Looking at rental costs, the most expensive region is the Basque Country where 34.36% of annual income is required to pay rent. Madrid, the Balearic Islands and Valencia all require more than 30% of income, with figures of 35.89%, 30.45% and 30.34% respectively. The cheaper regions of the country are Castilian Mancha (21.09%), Galicia (21.24%), Navarre (21.70%) and Cantabria (22.09%).
Meanwhile, for home owners paying a mortgage, the most expensive is also the Basque country where the average percentage of annual income required to pay a mortgage is 31.77%, the only region where you will need more than 30% of income. In The Balearic Islands homeowners require an average of 27.22% of income, while in Madrid the figure is 24.43%.
Castilian Mancha is also one of the cheapest for mortgage payments with the average figure being just 14.95%. Other regions with figures well below the national average are Navarra (16.53%), Murcia (16.97%) and Aragonese (17.94%).
