Housing is not as expensive as in 2007 — the problem is Spain is much poorer now
Spanish housing is not as expensive as in 2007 once adjusted for inflation. The real problem is the loss of purchasing power and tax pressure that have made Spaniards much poorer.
English · Original discussion in Spanish · Published
Housing is not as expensive as in 2007: the nominal price mirage
Housing is not as expensive now as it was in 2007 once you adjust the value of money for cumulative inflation. The real problem lies not in a housing bubble, but in a structural loss of purchasing power that has left wages stagnant in the face of a cost of living and a tax burden that suffocate any ability to save.
The impact of inflation on real wealth
Analysing nominal prices is a statistical trap. While the cost of living has risen dramatically — with clear examples such as petrol, which has gone from an average of 1.09 euros in 2007 to ranges of between 1.55 and 1.65 euros today — wages have not kept pace. Measured in real terms, housing is cheaper today than at the peak of the previous bubble in many areas, but the average citizen is, in terms of purchasing capacity, significantly poorer.
The gap between buying and renting
The official narrative ignores the divergence between the sales market and the rental market. While sale prices remain contained once adjusted for inflation, the rental market has seen a radical escalation. In cities like Valencia, flats that rented for 300 or 400 euros a month in 2007 have reached 1,200 or 1,300 euros in 2026. This distortion suggests that access to housing is not a problem of asset prices, but of cash flow for families, aggravated by a tax burden that acts as an unsustainable drag on income from work.
Impoverishment is not a subjective perception, but an arithmetic reality. When taxation on labour becomes an armed robbery, housing ceases to be a consumer good and becomes an unattainable luxury, regardless of whether the nominal price is higher than two decades ago or not.
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Housing is not as expensive now as it was in 2007 once you adjust the value of money for cumulative inflation. The real problem lies not in a housing bubble, but in a structural loss of purchasing power that has left wages stagnant in the face of a cost of living and a tax burden that suffocate any ability to save.
The impact of inflation on real wealth
Analysing nominal prices is a statistical trap. While the cost of living has risen dramatically — with clear examples such as petrol, which has gone from an average of 1.09 euros in 2007 to ranges of between 1.55 and 1.65 euros today — wages have not kept pace. Measured in real terms, housing is cheaper today than at the peak of the previous bubble in many areas, but the average citizen is, in terms of purchasing capacity, significantly poorer.
The gap between buying and renting
The official narrative ignores the divergence between the sales market and the rental market. While sale prices remain contained once adjusted for inflation, the rental market has seen a radical escalation. In cities like Valencia, flats that rented for 300 or 400 euros a month in 2007 have reached 1,200 or 1,300 euros in 2026. This distortion suggests that access to housing is not a problem of asset prices, but of cash flow for families, aggravated by a tax burden that acts as an unsustainable drag on income from work.
Impoverishment is not a subjective perception, but an arithmetic reality. When taxation on labour becomes an armed robbery, housing ceases to be a consumer good and becomes an unattainable luxury, regardless of whether the nominal price is higher than two decades ago or not.
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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 (13 replies).
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