Spain’s housing crisis deepens amid low wages and legal uncertainty

Housing prices in Spain are climbing faster than wages, a key factor behind the country’s growing housing crisis. Experts at the first National Housing Congress last week highlighted that low salaries and legal uncertainty are making the situation particularly severe.

Civil Law Professor Matilde Cuena Casas of the Complutense University of Madrid, and Vice President of the Hay Derecho Foundation, pointed out that “no matter how much we try to make housing affordable or implement policies to lower costs, wages must be decent. What many young people are paid today is an insult.”

She called for policies to boost productivity and improve salaries, noting that without better wages, young people cannot afford home ownership, rental housing, or shared living arrangements. “The solution is simple: ensure people are not poor and that they are paid properly,” she said.

In major cities such as Madrid and Barcelona, rent can consume up to 70% of a family’s income, which Cuena described as “unsustainable. No economy can withstand it.” Data from property portal Idealista show that, on average, Spanish households spend 36% of net income on rent, with particularly high figures in Palma (46%), Barcelona (45%), Málaga (41%), Valencia (40%), Alicante (39%) and Madrid (39%). Buying a property requires around 25% of household income on average, though in some cities this exceeds the 30% maximum recommended by experts: Palma (45%), Málaga (38%), San Sebastián (38%), Madrid (33%) and Barcelona (31%).

Cuena highlighted the wider consequences of high housing costs, including delayed emancipation among young people and declining birth rates, warning that these trends could trigger a future crisis. The youth emancipation rate in Spain fell to 15.2% in the second half of 2024, the lowest for that period since records began in 2006. Birth rates remain at historic lows: in 2023, there were just 6.61 births per 1,000 inhabitants, down from over 18% in 1975. Spain has been one of the EU countries most affected by the post-2008 decline in fertility, with domestic births falling 38% between the Great Recession and 2023, according to the Savings Banks Foundation (Funcas). Only Germany, Luxembourg, Cyprus, and Malta bucked this trend.

Legal insecurity: a major barrier to housing access

Cuena also stressed the urgent need to strengthen legal certainty in Spain’s housing market. She highlighted factors behind the country’s chronic housing shortage, including growing demand, a lack of social housing for vulnerable groups, and unstable regulations that create legal uncertainty.

“What is clear is that we have an enemy that no one disputes: the legal insecurity that plagues the housing market. This is a very Spanish problem,” she said. “The level of legal insecurity here does not exist in most other countries—it is uniquely ours.”

Policies contributing to this uncertainty include the five-year suspension of evictions for unpaid rent, which may be extended into 2026, and rent controls in high-pressure areas, now covering over 300 zones across Spain. Cuena argued that these measures have created a contractual imbalance between landlords and tenants, “and all of this is driving the situation we are currently experiencing.”