Spaniards spend 40% of income on rent
The OECD (the Organisation for Economic Co-operation and Development) says Spanish families who rent their home spend a larger proportion of their income to pay the rent than any other country.
According to the institution, 36% of Spanish families who rent have to spend two euros in five (40%) of their total household income to be able to cover their monthly rental costs.
To make matters worse, the organisation is also suggesting that the situation could get worse in a country where incomes rarely increase while house prices continues to do so.
According to Eurostat, the EU statistics office, the price of residential property is rising at a rate of 4% year-on-year. This is well above the Eurozone average of 2.9%. Also, the Ministry of Public Works confirmed that the average price per m² of private housing now exceeds 1,500 euros. This price marks a three-year high.
And more increases are forecast for the next few years. Research by the BBVA suggests the average price of housing in Spain will increase by around 2.5% this year, and by 3.5% in 2017. These figures are similar to those provided by Bankinter and CaixaBank.
The latest annual data from idealista suggests rental costs have risen 10.7% nationally in the third quarter of this year. This was due in part to demand in the larger cities pushing up the average costs despite slight declines in other regions.
Mortgage Rank
The OECD data also places Spain in fifth place for the cost of mortgages. The report shows that 18% of mortgaged households require 40% of their income to cover their monthly mortgage payments. Spain are ranked fifth behind Sweden, Greece, Ireland, France and Luxembourg.
Experts have often suggested that whether renting or owning, housing costs should not exceed 30% of income.
