Coronavirus crisis slows young Spaniards’ ability to leave home

Spain has just over 6.8 million people between the ages of 16 and 29, and barely one million of them live outside the family home. This means just 14.9% live in their own independent housing, the lowest figure so far this century.

According to the latest Emancipation Observatory study, covering the first half of 2021 and published by the Spanish Youth Council (CJE) on December 16, one would have to go back to 1998 for a worse statistic.

The causes are fundamentally economic. The coronavirus crisis may have brought down house prices, but it has also affected the labor market and has had a particularly negative impact on workers in temporary or precarious employment. “Young people are not getting out of the crisis; we are not recovering,” said the president of the CJE, Elena Ruiz Cebrián.

Produced every six months and based on the analysis of microdata from the National Statistics Institute (INE), the study helps understand why it is more difficult for young Spaniards to leave home than for most of their European counterparts. A significant factor is the relationship between salary and housing prices. Given the typical cost of a rental property and the average salary of those under 30, a young person would have to spend 81.9% of their income on rent in order to live alone.

In the end, you get into a vicious circle and we need courageous policies that address structural issues; we can’t keep putting patches on things

Elena Ruiz Cebrián, president of CJE

If they wanted to buy – say they had the savings or family support needed to cover the 20% down payment and taxes not covered by the bank mortgage ­– they would still have to spend 51.2% of their salary on their mortgage repayments. Both percentages are slightly better than at the end of 2020, but the CJE points out that they are still well below the 30% that is generally recommended to avoid getting bogged down in debt from housing expenses.

The problematic ratio is compounded by income instability. As the pandemic evolved, employment prospects improved: the employment rate for those under 30 stood at 38.4% during the first half of 2021. This is 4.9 points higher than in the previous study, but there is no shortage of data to overshadow this statistic. On the one hand, young people have not yet recovered their pre-coronavirus employment level, which stood at 40.8% at the end of 2019. Meanwhile, temporary contracts rose by 5.7 points and stood at 54.7%. In other words, more than half of young people hold a job on a casual basis while those with part-time jobs accounted for 27.8%. Neither of these two situations, according to the study, is a matter of choice.

Pessimistic outlook

It seems that younger generations no longer have the chance to decide on certain aspects of their lives. “It has become fashionable to talk about sharing an apartment in the same way that it was once said that we should go abroad to learn English,” says Ruiz. “This seems to show a lack of perspective: there are people who go abroad to learn languages and people who share housing for that experience; but most do not do it because they want to, but because it is the only thing they can afford to do.” The CJE, for example, calculates that the average salary would only be enough for each young person to rent a home with a surface area of 29.3 square meters.

Given the data, it is hard not to feel pessimistic. According to the study’s authors, “if the economic crisis that began in 2008 had already permanently affected the life trajectories of an entire generation, the crisis of 2020 is exacerbating the situation, given that the young people who are being subjected to it have a more precarious departure point.”

Basically, the problems of living independently in Spain “have always been structural in character.” In contrast, “few of the temporary improvements that periodically occur in the field of employment and housing result in an improvement in the overall situation of this demographic.”

The latest study shows how only certain members of the 30-and-under group benefit from upticks. The better employment situation, for example, is only noticed by those with higher education. And, both from the point of view of work and housing, young women always appear to fare worse than men.

The Spanish model

The president of the CJE highlights the contrast between a situation “which not only affects many young people, but also hinders the entire country’s model” and the solutions that pop up randomly from time to time. “If you have a home and want to buy another, you can use your own apartment as collateral, and if you have a car and want another, there are plans to help finance the purchase of the second one with the sale of the first,” says Ruiz. “Ultimately, it is an economic model that leaves young people aside, if not outside, and it is vital to make specific policies to facilitate getting on the first rung of the ladder.”

The CJE doubts the effectiveness of one-off financial support and fears that promised measures such as direct housing aid for young people will end up benefiting landlords if prices rise. “In the end, you get into a vicious circle and we need courageous policies that address structural issues; we can’t keep putting patches on things,” says Ruiz.

Given the backdrop, even the sustained decline in poverty seems only a relative achievement. Some 30.3% of people under 30 are at risk of poverty or exclusion under the definition in the widely used AROPE indicator. But the CJE suspects that this percentage, which is calculated on data from an earlier period, does not yet reflect the full impact of the crisis. Meanwhile, the study’s authors point out that it does not necessarily reflect an improvement in the material conditions of young households. In an environment that is not conducive to life projects, the most vulnerable have had no choice but to take refuge in their parents’ homes once more.