Spanish rents have risen much faster than salaries Spain over the last five years according to recent reports by the Bank of Spain and the country’s National Statistics Agency (INE).
The reports show that salaries in Spain have only increased by 1.6 per cent since 2013, whereas Spanish rents have shot up by as much as 50 per cent.
Whereas Spaniards earn only 1.6 per cent more in wages than they did five years ago (€23,646 a year on average in 2018) they’re paying twice as much in Spanish rents than they did in 2013.
While good news for overseas property investors investing in Spain, it has obviously spelled bad news for many tenants in Spain, 42 per cent of whom spend 40 per cent of their monthly wages on rent (Eurostat figures).
Skyrocketing Spanish rents may also explain why the country remains a nation of homeowners (80 per cent 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 spiralling ‘alquileres’, Spanish estate agencies are warning that the lack of rental properties on offer is only serving to push Spanish rents higher and make the situation worse.
Where Have Spanish Rents Risen the Most
Mallorca’s capital Palma and Barcelona have seen the sharpest rise in average rent prices, with homes in both cities now costing more than 50 per cent more than five years ago.
They are 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 per cent more expensive to rent than in 2013.
Santa Cruz de Tenerife in the Canary Islands has also seen a rise of 40 per cent in Spanish rents in just five years.
Overseas property investors can look forward to strong rental yields on their investments, even if renting long-term.