€1,500 a month from renting: a symptom of a failed economy
A professor earns €2,000 a month renting out his flat in Valencia, Spain, the same salary he made while working. Economist Borja Sanjuán has reignited the debate: is the economy failing?
English · Original discussion in Spanish · Published
€1,500 a month from renting: a symptom of a failed economy
A university professor who moved to Madrid left his flat on Avenida de Francia in Valencia up for rent. He received offers of up to €2,000 a month. He was surprised himself: "I had to spend many years working at the university to earn €2,000 a month. And now, simply by owning a property, I earn it." The reflection, picked up by economist Borja Sanjuán in El Confidencial, has peine the debate over whether a society that allows people to generate €1,500 in passive income from a single property is economically failed.
The passive income dilemma
The case is not an isolated one. While a 60-square-metre flat on Calle Ibiza in Madrid rents for €800, prime areas of Valencia fetch €2,000. The gap between labour and capital has exploded. Free-market defenders argue it is simple supply and demand: housing is scarce and demand is high. But others point out that when an asset generates more than a skilled salary, the system has lost its balance.
Reactions and extremes
The debate on social media has been ugly, ranging from crude comparisons with prostitution to outright insults. But beyond the noise, an uncomfortable question arises: are we facing an asset bubble that is pushing workers out of cities? Price evidence in Madrid and Valencia suggests that land rents have eaten away at the purchasing power of the middle classes.
What goes unsaid
Behind the €1,500 figure lies a global phenomenon: the financialisation of housing. Real estate assets have become investment vehicles, and their returns now compete with those of work. While wages grow below inflation, rents soar. The Valencia professor's paradox is just the tip of the iceberg.
What no analysis quite explains is why, with these incentives, property ownership has become the only safe haven for the middle class, and why the labour system fails to deliver equivalent incomes without owning bricks.
Related debates in the forum
A university professor who moved to Madrid left his flat on Avenida de Francia in Valencia up for rent. He received offers of up to €2,000 a month. He was surprised himself: "I had to spend many years working at the university to earn €2,000 a month. And now, simply by owning a property, I earn it." The reflection, picked up by economist Borja Sanjuán in El Confidencial, has peine the debate over whether a society that allows people to generate €1,500 in passive income from a single property is economically failed.
The passive income dilemma
The case is not an isolated one. While a 60-square-metre flat on Calle Ibiza in Madrid rents for €800, prime areas of Valencia fetch €2,000. The gap between labour and capital has exploded. Free-market defenders argue it is simple supply and demand: housing is scarce and demand is high. But others point out that when an asset generates more than a skilled salary, the system has lost its balance.
Reactions and extremes
The debate on social media has been ugly, ranging from crude comparisons with prostitution to outright insults. But beyond the noise, an uncomfortable question arises: are we facing an asset bubble that is pushing workers out of cities? Price evidence in Madrid and Valencia suggests that land rents have eaten away at the purchasing power of the middle classes.
What goes unsaid
Behind the €1,500 figure lies a global phenomenon: the financialisation of housing. Real estate assets have become investment vehicles, and their returns now compete with those of work. While wages grow below inflation, rents soar. The Valencia professor's paradox is just the tip of the iceberg.
What no analysis quite explains is why, with these incentives, property ownership has become the only safe haven for the middle class, and why the labour system fails to deliver equivalent incomes without owning bricks.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (20 replies).
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