Spain Housing Crisis Deepens as Wages Fail to Keep Up With Property Prices

Spain’s housing crisis is making it increasingly difficult for workers to rent or buy homes, as property prices continue to rise much faster than wages. Even people in regular employment are struggling to secure decent accommodation, particularly in major cities where housing demand remains high.

According to data cited by Euronews from Spain’s National Statistics Institute (INE), house prices increased by 84.6% between 2015 and 2025, while average annual gross wages rose by just 27.85% between 2015 and 2024.

The gap between housing costs and earnings has left many households struggling to meet basic housing needs. The situation is particularly difficult for young people and low- and middle-income earners who depend primarily on their salaries.

Rising Rents Leave Workers With Less to Spend

Rent has become a major financial burden for households across Spain. A report by Oxfam Intermón found that approximately 770,000 people were affected by in-work poverty linked to housing costs.

The study also found that about one in three workers renting at market prices fell into poverty after paying rent. This highlights a growing problem for people who earn an income but still struggle to cover other essential expenses after paying for accommodation.

Figures from the Bank of Spain also indicate that four in ten households living in rented accommodation spend more than 40% of their income on rent.

The pressure is especially severe in major cities and areas heavily affected by tourism, where demand for accommodation has contributed to rising housing costs.

Saving for a Home Deposit Is Becoming More Difficult

Buying a home has also become increasingly difficult for people who want to move from renting to homeownership.

Economist Rafael Pampillón told Euronews that the challenge extends beyond the ability to make monthly mortgage payments. Buyers must first save enough money to cover the initial deposit and other purchase-related expenses.

With an average home price of around €200,000, prospective buyers may need approximately €60,000 to cover the deposit and associated costs.

However, workers who spend a large portion of their earnings on rent often find it difficult to accumulate these savings. This creates a cycle in which people remain renters for longer, while rising property prices make homeownership even harder to achieve.

Family financial support has consequently become an important advantage for people trying to enter the housing market. Those without access to family savings or other financial assistance face greater barriers.

Housing Shortage Adds to the Crisis

The affordability problem is also linked to a shortage of available homes.

According to figures cited from the Bank of Spain, the country accumulated an estimated housing deficit of around 750,000 homes between 2021 and 2025.

In 2025, approximately 225,000 households were formed, while only around 92,000 new homes were completed.

The difference between the number of households needing accommodation and the supply of newly completed homes has added pressure to the market.

Experts have also pointed to the effects of the financial crisis, slow wage recovery and increased investment activity in the property sector as factors contributing to the widening gap between household incomes and housing costs.

Unions Demand Action on Wages and Housing

Spain’s housing affordability crisis has intensified public debate and prompted trade unions to demand stronger measures from the government.

The country’s major trade union confederations, Comisiones Obreras (CCOO) and the General Workers’ Union (UGT), have called a 24-hour general strike for 11 November under the slogan “wages, housing, prices.”

The unions are also seeking at least a 7% increase in the statutory minimum wage in 2027, which would take it above €1,300 across 14 annual payments.

However, union leaders acknowledge that wage increases alone cannot resolve a housing market where property prices are rising significantly faster than earnings.

CCOO has proposed allocating at least 1% of Spain’s annual gross domestic product to public housing for ten years. The union has also called for measures to address speculation and contain property price increases.

Experts Call for Long-Term Housing Reforms

Economists and housing experts argue that Spain needs a broader strategy that addresses both household incomes and the supply of affordable homes.

Proposals include making land available for development, speeding up building permits, improving infrastructure coordination and reducing unnecessary administrative costs associated with construction.

Expanding public and social housing is also seen as an important part of the response, particularly for households that cannot afford market-rate rents.

The European Commission has identified a serious mismatch between housing supply and demand in Spain, alongside a shortage of affordable and social rental housing.

The crisis demonstrates that employment alone may no longer be enough to protect households from housing insecurity. Without stronger housing supply and policies that improve affordability, many workers could continue to struggle to rent suitable homes or save enough to purchase their own properties.