Forumer Calculates 1970s Madrid Flat Worth 250x More Today

A 700,000 peseta flat from the 1970s now sells for 250 times more

A 1970s real estate ad listed a flat at around 700,000 pesetas, roughly 4,000 euros today. A user calculated that the same type of housing in Madrid’s Francesco Silvela 37, Cáceres, now lists for up to 250 times the original price: 1,000,000 to 4,000 equals 250, with a conservative estimate at 75. This ignores that the original was new, while current units have changed hands multiple times.

This forms an uncomfortable reading of Spain’s real estate market: housing prices rose, but money lost value. Some argue bricks acted as a silent wealth transfer between generations, with failures accumulating in land, public works, and salaries.

How many years of salary did a flat cost in the 1970s?

The key metric is the salary-to-price ratio. Early in the decade, the minimum wage was 21 euros (3,000 pesetas), rising to 125 euros by decade’s end. Covering a 700,000 peseta flat required 233 to 87 months of work: eight to twenty years of full salary.

The calculation varies as the minimum wage changed rapidly. One summary: 700,000 pesetas over 3,000 equals twenty years of pay. Today, a 1,200-euro monthly loan over 240 months totals 280,000 euros. The comparison, despite flaws, suggests current buyers fare similarly or worse, debunking the 1970s as a golden age for buyers.

The inflation trap: why debt paid itself

Crucially, past loans differed from modern mortgages. Interest rates were fixed and high: 10% to 20%, compared to today’s 5%. Inflation often exceeded 15%, with salaries rising similarly.

This heavily favored existing borrowers. Nominal debt stayed fixed while salaries grew, making payments trivial over time. This mechanism explains how families accumulated wealth: not by buying cheap, but by inflation eroding their debt. Meanwhile, entry barriers remained high, with limited family help and strict bank limits.

From 300,000 pesetas in working-class areas to 300,000 euros

Historical records show a direct executive earning over 1.5 million pesetas annually in January 1977, a supermarket attendant 240,000, and domestic staff 180,000. On the same page, small flats in working-class areas started at 300,000 pesetas, with average housing between one and two million.

Decade jumps repeat these patterns. A 100-square-meter flat near Madrid cost three million pesetas in the 1980s, when a worker earned 60,000 net over 14–15 payments: roughly three years’ salary. A city flat bought in 1982 for eight million now worth 300,000 euros. A provincial unit, three million in 1978, now 140,000 euros. The wide range—some areas revalued more than others—fuels much of the disagreement.

Land, public works, and unsold stock

Debates on origins vary. Some point to the 1980s, when bricks became financial assets and prices surged globally. Others focus on land: authorities control planning, driving costs throughout the chain. Others recall that between 1961 and 1975, four million flats were built for 35 million people (11.5% of total), versus just over one million in the last fifteen years (2%).

This creates a self-reinforcing shortage. Without new construction, demand shifts to old flats, and renovation costs—around 1,000 euros per square meter—push final prices up. Protected housing, once a buffer, now barely impacts the market.

Costs added to the base price

Beyond the brick price, taxes and transaction fees increase costs. Financing adds weight: a twenty- or thirty-year mortgage results in paying significantly more than the flat’s original cost. What was sometimes settled with short-term bills in the 1970s now involves long-term loans spanning half a working life.

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Given these factors, one might expect a correction or cap. Instead, each comparison between 1970 and today leaves average salaries out of the equation. The lingering question—whether the problem is housing or the money used to pay for it—remains unanswered by those crunching the numbers.