Prices and wages no longer go together, but are diverging more and more, which causes a significant loss in purchasing power for workers who are currently experiencing 8.7% inflation. This imbalance also affects housing, which is causing a major blow to the domestic economy, which must make greater efforts to purchase a house. Flats for sale have also been a major part of this escalation rally. They are now more expensive by 15.6% in the past five years, while the remuneration paid to Spaniards is only 5.9%. According to the “Relationship between salaries and the purchase housing in 2021” study, published by Fotocasa and Infojobs, the price of housing has almost tripled in the past five years.
As you can see from the report, the average price per square meter rose 1.7% in 2021. However, wages dropped 2.5% due to the pandemic that followed four years of chain increase. In particular, 15 of 17 autonomous communities saw their average salary fall last year, while 15 communities saw an increase in the cost of housing.
The Canary Islands were the most affected by the fall in wages. They saw a 6.8% decrease in their income in 2021. In 2021, the Canary Islands received 23,082 euros annually. However, the cost of housing rose 0.9% to 1,782 euros/square meter (euros/m2). Contrary to popular belief, Asturias was the only region in which the average salary increased and housing prices fell in 2021 and the five preceding years.
La Rioja, on the other hand, is the community where the housing market has seen the highest price increase in the past year. Its rise was 5.4%, 19.1%, since 2016. Rioja residents have seen their square meters of property for sale go up from 1,245 euros/m2 back in 2016 to 1,483 euros/m2 (that’s 19.1% more) in five years. The average wage in La Rioja has fallen by 3.3% in the last five years, and it is not surprising that they have only increased by 8.3% over five years. They have also gone from 23,267 euros/year to 22,499 euros/year 2021, which is 3.3% less.
