Spain’s trade union calls for pay rises to address housing crisis

Spain’s UGT trade union has called for pay rises to address the increasing difficulty of home ownership in Spain.

Fernando Luján, of the UGT, has said that house prices and mortgage costs should be one of the factors taken into account when negotiating wage increases. A UGT report recently estimated that wages in certain sectors and regions would need to double if mortgage payments are to remain below 40% of salary (Spain’s Housing law recommends 30%).

The union claims that, even at 40%, house prices are such that the average worker will spend 52 years paying off a mortgage. Even if a young person starts work at age 18, they won’t finish paying until they’re 70.

Of course, very few Spanish 18-year-olds are making the down payment on a property, which costs around four years of average salary. In fact, thousands of Canarian young people under the age of 35 are estimated to have returned to live with their parents last year, unable to afford the soaring rents on the islands.

Rental prices have increased by 13.6% in one year, and figures show that the average young Canarian wage earner needs to allocate more than 100% of their net salary just to rent a home, without including other expenses.

And there seems to be little relief in the future. On Lanzarote, 2,295 families are on the official waiting list for social housing, and that number is only likely to increase.

Nevertheless, only 615 homes are planned or being built on the island.

Lanzarote is not the only place in the world to suffer an acute housing crisis, of course. Similar situations have arisen in tourist destinations all over the world, where overseas buyers and speculators snap up valuable property, and where holiday rentals are more lucrative than residential lets.

But the negative effects of the crisis continue to increase, from the difficulty of attracting professionals to an island where homes are so expensive to the disillusion and lack of hope for young people who cannot see a way out of the cycle of low wages and unaffordable housing.