Mercedes, who works for Mercedes, earns around 1,050 euros gross in January, which is close to the 1,134 euros gross in 14 payments that the government has set as the minimum wage for 2024. Her contract states she works 30 hours for which she earns about 823 euros. However, with overtime, she reaches the minimum wage. The biggest expense she faces each month is the rent for her 32 square meter apartment in Madrid, which costs 650 euros. Her partner works in cleaning and earns about 400 euros, making it even more difficult if she lived alone. Paying for the house consumes 45% of the couple’s income (62% if she lived alone), much higher than the recommended maximum of 30% by experts.
Spain leads the European statistics of low-income tenants struggling with high rents. Average prices offered on real estate portals exceed 30% of the minimum wage in more than 20 provinces. In fact, an average rental in Spain would consume more than 40% of the minimum wage, reaching 70% in cities with high tensions like Barcelona. Following Barcelona, Madrid, and San Sebastián are the most expensive cities. In total, 18 Spanish capitals have rental prices that exceed the recommended effort rate of 30% for low-income tenants. The situation is particularly challenging for young people as 27% of workers aged 16-24 earn the minimum wage, making it difficult for them to become independent due to high rent prices.
The soaring rent prices have eaten up much of the 54% increase in the minimum wage since 2018. The average rent price in Spain has grown by 33% between January 2018 and January of the current year. Catalonia is the only region willing to apply rent limits as per the new housing law. In Barcelona, using the average price from the new reference price index presented by the Ministry of Housing would slightly ease the burden for renters. However, it still remains high for those on the minimum wage. The situation has also been exacerbated by the pandemic, leading to further deteriorating living conditions for many tenants.
Low-income renters face structural challenges and find it harder to access affordable housing. For many, renting consumes a significant portion of their income, making it difficult to make ends meet. The lack of affordable public housing is a concern raised by experts, as it leads to a divide between rich property owners and poor tenants. The situation has led many to live in inadequate housing conditions or share living spaces with multiple families due to the high cost of renting a full apartment.
The issues surrounding the high rental prices in Spain are not limited to the major cities but spread out to other regions. Many renters find themselves struggling to make ends meet, even if rent does not consume a large portion of their income. The rental market in Spain is particularly challenging for young people, as the combination of low wages and high rent prices makes it difficult for them to achieve independence. The country’s lack of social housing further exacerbates the problem, leaving many low-income families in precarious living situations.
