🏠 How Much Should We Be Earning Today If Salaries Had Kept Up With Housing Prices?

For years, we’ve heard that “housing is expensive.” But while that may be true, it doesn’t really explain the core issue.

To truly understand what has happened in Spain, there’s a much clearer way to look at it: not by focusing on property prices alone, but by asking a simple question:

👉 How many years of work does it take to buy a home?

And this is where the reality becomes much more striking.

📊 Spain in 1980 vs Today

If we go back to the late 1970s and early 1980s, the numbers were very different. At that time, the average annual salary in Spain was around 300,000 to 400,000 pesetas (approximately €1,800–€2,400 per year).

Meanwhile, the average property price ranged between 1.2 and 1.6 million pesetas (around €7,000–€10,000).

This means a home cost roughly 3 to 4 times the annual salary.

Today, the picture is very different. The average salary in Spain is around €31,000 per year, while the average property price is approximately €220,000–€260,000.

In other words, buying a home now requires 7 to 8 years of gross salary.

That’s roughly double what it was 40 years ago.

💸 The Often Overlooked Factor: Mortgages

Some people argue that it was harder in the past because interest rates were much higher. And that’s true—mortgage rates in the 1980s could reach 10% to 15%.

However, mortgages were shorter (typically 10–15 years), and more importantly, property prices were much lower.

Even with high interest rates, the overall financial effort remained manageable.

When everything is taken into account, a buyer in 1980 would spend approximately 8 to 10 years of salary to fully pay off their home.

Today, the situation is reversed. While interest rates have been relatively low in recent years (around 2%–4%), mortgage terms have extended to 25 or even 30 years, and property prices are significantly higher.

As a result, the total effort rises to approximately 12 to 14 years of salary.

🧮 A Simple Example

Let’s compare two real-life scenarios.

In 1980, someone earning around €2,000 per year could buy a home for about €8,000. After paying the mortgage, the total cost would be roughly €16,000—equivalent to about 8 years of salary.

Today, someone earning €31,000 per year faces property prices of around €240,000. The total mortgage cost can reach close to €400,000.

That means a total effort of around 13 years of salary.

👉 Today, you need to work several more years to achieve the same goal.

🚨 So… How Much Should We Be Earning Today?

This is where things get particularly interesting.

If salaries in Spain had increased at the same pace as housing prices since the late 1970s, the average salary today wouldn’t be around €31,000.

It would be significantly higher.

To maintain the same level of affordability as in 1980, the average salary would need to be approximately:

💥 €120,000 to €150,000 per year

👉 That’s roughly €10,000 to €12,500 per month

🔍 Why Has This Happened?

This gap is the result of several long-term factors.

Easier access to credit from the 1990s onwards allowed more people to buy homes, which pushed prices higher. At the same time, investment demand—both domestic and international—has grown significantly.

In many areas, especially coastal regions, tourism and foreign buyers have added further pressure on prices, while housing supply has not kept up.

Meanwhile, salaries have grown much more slowly.

📉 Market Consequences

This imbalance explains many current trends.

Fewer local buyers can afford to purchase property, while the market increasingly relies on foreign buyers and higher-income profiles.

At the same time, more people are forced into renting, which drives rental prices higher.

There is also a widespread feeling that “everything is expensive.” But in reality:

👉 The real issue is that salaries have not kept pace with housing.

📌 Conclusion

Buying a home in Spain today is not just more expensive in absolute terms—it requires significantly more effort relative to income.

In real terms, the effort has increased by around 30% to 50% compared to 40 years ago.

And that has fundamentally changed access to housing and the structure of the real estate market.