Over the past five years, gains in house prices have outpaced wage growth in many regions, creating a persistent mismatch that affects young people most acutely. In the province of Alicante, for example, property values rose noticeably faster than average incomes, making it harder for newer buyers to enter the market and secure a home they can afford without long-term financial strain.
A recent study that combines the Fotocasa housing index with average wage data from available job postings highlights clear gaps between earnings and housing costs. Looking at the broader 2016–2021 period, salaries increased modestly while home prices climbed at a much faster pace, underscoring a widening affordability gap. In Alicante, the gap is smaller than the national average but remains substantial enough to limit access to home ownership for many residents.
The affordability squeeze intensified in the last year as wage growth paused and inflation rose. Average wages showed a decline, while the housing market continued its upward trend with prices edging higher. In Alicante, the average annual salary dipped to around twenty-three thousand euros, and the price per square meter rose again, narrowing the margin between what people earn and what homes cost. This combination compounds the challenge for households aiming to purchase property in the province.
Speaking to the situation in other regions, Santa Cruz de Tenerife experienced a notable drop in average earnings from the previous year, while housing prices increased. Residents saw a fall in real income even as the value of homes rose, contributing to more pronounced affordability pressures in that market as well.
Among the provinces, Málaga stood out for a marked rise in house prices over the year, accompanied by a dip in average earnings. Homeowners and buyers there faced higher per-square-meter costs while incomes did not keep pace, widening the gap between earnings and property values. In contrast, some other provinces benefited from rising wages alongside softer price trends, easing affordability in those areas.
A handful of regions saw a favorable combination of income growth and lower or stable housing costs, providing a more favorable environment for buyers. These shifts illustrate the uneven landscape across the country, where the balance between wages and property prices differs markedly from one province to another.
Experts emphasize that the central housing issue in Spain is not a single misstep but a structural imbalance. When wage growth lags behind property price increases, households must stretch budgets further to secure housing, especially in markets with rapidly rising prices. In inflationary contexts, this misalignment can worsen, eroding purchasing power and making real estate even more expensive relative to incomes.
Analysts also point to the long-term impact of the pandemic and subsequent economic conditions on wage dynamics. The economic disruption slowed the pace of salary growth, while energy costs and supply constraints have played a role in limiting workers’ purchasing power. As markets adjust, there is a call for policies or measures that help restore balance between earnings and housing costs, enabling more households to access stable housing without sacrificing financial security.