It’s not enough for young people to buy a house because they spend the day in bars or traveling. Certainly? The old debate about whether new generations are living worse than the previous ones has been revived after statements from journalist Elisa Beni, who confirmed at a meeting this week that today’s youth have the “all-legal” option to “live life and leave”. , but in the past, parents and grandparents have “sacrificed” to invest in their homes and stopped “going out for a beer.”
Asked on Twitter, Beni reaffirmed himself. “Traveling abroad, shopping, buying whims and buying a house… are Yuppie’s worlds.. No previous generation has done anything like this.”
It is a proven fact that young people have less and less. The recently published Household Financial Survey, a document produced every three years by the Bank of Spain, reveals that: The percentage of young owners has halved in less than a decade.
In 2011, 69% of youth under 35 owned a home.. In 2020, this rate dropped to 36%. This is a trend that has been observed since the worst years of the financial crisis: between 2012 and 2013 the tables changed, the number of young people living in rent exceeded the number of young people owning a home, and the gap did not stop. .
But is it really because young people spend too much on their free time? Or are there other reasons – your worsening financial situation, rising house prices and tightening access to credit — behind?
There is a definite consensus among the movements towards the housing and real estate sector on the following points: bad loop: rent consumes a large part of the salary, which prevents young people from saving and collecting the necessary money for an apartment, up to 20% of its value (Not counting the related expenses: notary public, administration and taxes).
We calculate in the graph below How much should a teenager stop spending to make a down payment on his apartment?on average and according to the provinces you live in.
The entrance fee for a 90-meter flat in Gipuzkoa, Spain’s province with the most expensive square meter, will be 58,626 Euros. 86 one-week holiday trip abroad (Based on the average daily expenditure of a Spaniard traveling abroad: 96.85 Euros). If a young drifter made such trips twice a year, he would have to ‘cut’ for 43 years to get an entry.
If the same young man from Gipuzkoa chooses to unsubscribe from Netflix and keep 12.99 euros per month, After 376 years, he would have enough money to go to the bank and ask for his money. mortgage. Things are not looking good in the Balearic Islands, Madrid, Bizkaia, Barcelona and Malaga. These provinces and their capitals are also the provinces with the largest increases in rental prices, up to 41% in recent years.
On the opposite side of the table are Ciudad Real, Cuenca and Jaén. the average entry for an apartment does not exceed 13,000 euros. Still, those few trips you should stop doing: between seventeen and nineteen.
Economic conditions worsened
Ignacio Garijo is a young Andalusian who asked himself the following question while doing his latest project in Economics. How the conditions of young people changed after the great crisis of 2008. “To justify it, I put forward the hypothesis that they were getting worse. And I thought that it wouldn’t be like that, things would get a little better or we would be the same, which would be bad news anyway. With the data I saw, it got worse,” he says. Increasingly sad“.
In his work, which Garijo summarizes on Twitter, he analyzes perceptions of the labor market, income, poverty and inequality rates, access to housing and youth, and compares 2006 and 2018 data.
“This is a relatively new problem and concern for millennials. “After the crisis, the recovery started, but when it was seen that things did not improve at all in 2017 and 2018, many economists, not just Spaniards, began to examine it,” he says.
The young man, in the southern European countries of ESADE The ‘post-crisis generation’ earns lower incomes and has lower employment rates More people born between 1975 and 1984 than the generation before it. As a result, and because of “time lost” in the first ten years on the labor market, emancipation rates, home ownership, fertility and potential wealth. This is not true everywhere: the post-crisis generation in Germany has better economic conditions than before.
Economist Juan Luis Jiménez has also compiled different evidence about the deteriorating economic situation of Spanish youth. For example: younger generations they earn less and less for their jobs and the difference does not disappear until the age of 35.
to measure saving capacity Between 2006 and 2018, Garijo used contributions to individual retirement plans that fell across all age groups, particularly youth and adults up to age 44. “It may be because they are not providing profitability or because these groups have lost their ability to save,” he says.
The ESADE report measured the “ability to accumulate wealth” and concluded: The pre-crisis generation was able to save more in their thirties than the post-crisis generation.
No flats without savings (or family assistance)
Parallel to the loss of economic capacity of young people, house price increasetriggered in the OECD environment since 1990 and more difficult conditions for access to credit after sins committed by the bank during the bubble.
In Spain, prices peaked before they exploded and have climbed again since 2015. Trade figures close to 2008. He also underlines that half of these sales are made without a mortgage.
if the young cannot who buys Persons who have previously owned capital, sold their previous home, received inheritance or investors.
“This will become even more acute in the context of inflation and interest rate hikes.. Those who can access the property will be those who already own the property.Carme Arcarazo, spokesperson for the Tenants Union of Catalonia, said: “Housing is a paternal refuge for some; a farm for others, who pay half of what they earn on a rentier economy. The polarization between landlords and tenants will increase.”
Both the OECD and this Association provide data on the increase in housing spending within people’s budgets. Just as the prices of clothing, entertainment and especially food have fallen in recent years, house -rented or owned- represents a bigger bite in monthly expense each time. On average, and according to the INE’s latest survey of Family Budgets, 34% of the household budget (which rises to 44% in the poorest households).
The effort to buy a house in Spain also increased by 35%: in 2000 a family needed a full year’s salary of 8.2 to pay for a house; you need in 2022 11 years.
I mean, teens and teens outings, bars, and whims? millennials, who is not too young anymore, can’t buy a house? “It’s not about how many beers you’ve had that you can access credit, Can your family help you with the entrance or not? and how many siblings will the inheritance be distributed among families with owning parents”, synthesizes Arcarazo.
While the union agrees with the real estate industry on the problem, their methods of dealing with it are very different: the company public aid for youth access to credit (the main supporter of this idea is Ana Botín), housing movements, lease arrangement It protects the tenant and ensures a safer living.
Garijo finally makes a personal assessment. “Maybe it’s true that our parents and grandparents were sacrificed to the generation that had three jobs and worked from sunrise to sunset. But for today’s youth, that might be conformist, because You spend your whole life working to support the family, and on top of that, you romanticize it. We are now more pragmatic about the things we have to live with,” she concludes.
methodological note
We used the average price/m2 data to calculate the average entry per province. Recorded sales from the College of Registrars in the first quarter of 2022. We consider how much a 90 square meter apartment will cost and how much a 20% down payment on the mortgage will cost.
To calculate the price for a week abroad, we use data from the INE on-board tourism survey for the summer of 2019, as it was the last “regular” survey before the pandemic. Specifically, we use data on average daily expenditure per person traveling abroad: 96.85 Euros.
The accepted subscription to Netflix is ”Standard”, which is 12.99 euros per month.
Avocado price is taken from last week’s statistics. agriculture department: Its weight is 4.75 Euros.