What home could Spain's Prime Minister afford on his salary?
On €89,303 gross a year in 2007, Spain's Prime Minister couldn't even afford a 60m² flat in Madrid. The calculation that laid bare the housing bubble.
English · Original discussion in Spanish · Published
What home could a Spanish Prime Minister actually buy?
On €89,303 gross a year in 2007, the Prime Minister's salary worked out at roughly €3,989 net per month over 14 payments. Applying the 40% mortgage cap –the maximum banks would lend– the monthly payment could not exceed €1,595.60. With no prior savings, the typical Prime Minister couldn't get a mortgage above around €200,000 at the average fixed rate of the time. With that loan, and factoring in then-current prices (a 30-square-metre flat in Madrid already cost around €300,000), the realistic option was a shoebox on the outskirts or a small flat in a working-class neighbourhood.
The bubble that spares no one, not even the head of government
The exercise, which circulated as a meme in the early days of the crisis, showed just how inflated the Spanish property market was. Even the country's highest-paid office (with extra allowances not itemised) wasn't enough for decent housing in the capital without additional income. Back then, the Euribor was already at high levels and rising, squeezing the monthly payment even further. The result was damning: on his official salary, a Prime Minister could only afford a 50-60 square metre flat in mid-to-low price areas of Madrid, far from the Salamanca or Chamberí districts.
The irony of the system: extra income and multiple properties
Of course, reality diverged from the calculation. As some analyses pointed out at the time, politicians usually have supplementary income streams: allowances, bonuses and, above all, access to insider information or opaque property deals. Several former prime ministers accumulated property worth millions, far beyond what their official payslip would allow. The gap between the theoretical salary and the real wealth of the political class fuelled popular scepticism.
A classic that ages badly… or maybe not
The original thread, dated 2007, was dug up years later. With the Euribor soaring and prices still high, things hadn't improved for the hypothetical Prime Minister. In fact, with higher rates, the outcome would have been worse. The sarracena: if the man in charge can't buy a decent flat on his salary, the problem isn't a few struggling low earners, it's Spain's housing model. Or, viewed ironically, thank goodness prime ministers don't live on their salary alone.
Related discussions on the forum
On €89,303 gross a year in 2007, the Prime Minister's salary worked out at roughly €3,989 net per month over 14 payments. Applying the 40% mortgage cap –the maximum banks would lend– the monthly payment could not exceed €1,595.60. With no prior savings, the typical Prime Minister couldn't get a mortgage above around €200,000 at the average fixed rate of the time. With that loan, and factoring in then-current prices (a 30-square-metre flat in Madrid already cost around €300,000), the realistic option was a shoebox on the outskirts or a small flat in a working-class neighbourhood.
The bubble that spares no one, not even the head of government
The exercise, which circulated as a meme in the early days of the crisis, showed just how inflated the Spanish property market was. Even the country's highest-paid office (with extra allowances not itemised) wasn't enough for decent housing in the capital without additional income. Back then, the Euribor was already at high levels and rising, squeezing the monthly payment even further. The result was damning: on his official salary, a Prime Minister could only afford a 50-60 square metre flat in mid-to-low price areas of Madrid, far from the Salamanca or Chamberí districts.
The irony of the system: extra income and multiple properties
Of course, reality diverged from the calculation. As some analyses pointed out at the time, politicians usually have supplementary income streams: allowances, bonuses and, above all, access to insider information or opaque property deals. Several former prime ministers accumulated property worth millions, far beyond what their official payslip would allow. The gap between the theoretical salary and the real wealth of the political class fuelled popular scepticism.
A classic that ages badly… or maybe not
The original thread, dated 2007, was dug up years later. With the Euribor soaring and prices still high, things hadn't improved for the hypothetical Prime Minister. In fact, with higher rates, the outcome would have been worse. The sarracena: if the man in charge can't buy a decent flat on his salary, the problem isn't a few struggling low earners, it's Spain's housing model. Or, viewed ironically, thank goodness prime ministers don't live on their salary alone.
Related discussions on the forum
- *Legendary thread*: Is it a good time to buy? (Part III) · 94 replies
- Gabriel Rufián: because of Aznar, an entire generation of young Spaniards went out to work · 164 replies
- Housing cycle change: "I wouldn't buy property in 2026" · 319 replies
- One thing I'll tell you about Marina D'Or, even if it costs me my account. · 30 replies
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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 (71 replies).
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