Spanish housing prices jump 12.9%, widening the gap with wages

Housing up 12.9% and inheritance becomes the only way in

Housing in Spain now costs 12.9% more than a year ago. The Housing Price Index from the INE (Spain's statistics institute) for the first quarter matches its highest level since 2007, marks 48 consecutive quarters of increases, and the second-hand market hits a 19-year record with a 13.5% rise. At this point, the news is not the price: it is the resignation.

Because while some wait for the famous crash that never comes, others have decided the figure is irrelevant. If brick-and-mortar inflation outpaces the savings capacity of an average salary, it makes no difference whether prices rise 8% or 8,000%: the only route to homeownership for younger generations is inheritance. It is not a comfortable diagnosis, but it fits reality: prices have been decoupled from wages for years.

Supply and demand, the mantra that explains nothing

Supporters of market theory insist it is simple supply and demand. Demographic pressure, including the arrival of foreign population, keeps demand alive. The problem is that supply does not respond to price: less is being built than is being demolished, and available land never reaches the market. Meanwhile, demand is concentrated in an ever smaller group: those who already have wealth.

The conclusion is uncomfortable. If housing prices depend on inherited capacity rather than work, we are looking at a market that rewards the past and punishes the present. Those expecting a sharp correction may be right, but they have been waiting ten years for it. And when it comes, it will not be to make housing fairer: it will be to make it cheaper for those who already have cash.