Wages and housing affordability
- Evolution of wages: the ideal wage is defined as "the wage that allows you to completely pay off your mortgage with 5 years of full wage".
- Left axis (bars): the standard wage represents the net disposable income averaged for those over 18 years of age, Spain, in euros.
- Right axis (line): average mortgage amount, Spain, in euros.
- Wage disconnection (in percentage): if the value equals 30, it means that wages must increase by 30% to match the ideal wage.
- Housing affordability index (Base 100=1999), Spain: it considers income growth against housing and inflation growth.
Interpretation and observations
By looking at wages, convergence and divergence cycles are found. Divergence implies that housing prices grow faster than wages, and convergence the opposite.
- 2003 - 2007: Wage/price divergence.
- 2008 - 2013: Wage/price convergence.
- 2014 - 2021: Wage/price divergence.
Data sources
- Household disposable income (Saldos contables > Hogares e Instituciones > Renta disponible neta): Link
- Household savings (Saldos contables > Hogares e Instituciones > Ahorro neto): Link
- Mortgages (Results > Annual > National results and by Autonomous Community > Mortgages constituted, over the total properties, by nature of the property > Dwellings): Link
- Population according to INE (range of used population was that over 18 years old > Data used is from January 1st of the current year): Population consolidated
- Housing prices, from 1985 to 2006, according to Sociedad de Tasación (Access to data is under request, but can be seen in the linked publication): Publication, Link
- Housing prices, from 2007 onwards, according to the notaries (Grupo 5 > Acto 501 - Compraventa inmuebles > Inmuebles en fincas urbanas, viviendas): Link
- Inflation data (Table: average inflation Spain (CPI) - by year): Link