In Spain, the housing crisis has become more than just an affordability issue, but also a heavy psychological burden for the nation, affecting public sentiment across all demographic groups. The latest research shows that almost half of Spaniards (48.2%) believe that fewer people in their immediate circle can afford to buy a home compared to six months ago. However, the most pronounced decline in mood is observed among respondents aged 60 and over, including baby boomers, who, despite owning the majority of homes, are leading the wave of pessimism about their future affordability. Only 5.6% of them note an improvement in the conditions for buying a home in their social circle, which is in stark contrast to the more optimistic 21.7% of representatives of Generation Z.
This pessimism seems paradoxical, given that 80% of Spaniards over 65 own a home, compared to only 32% of people under 35. Experts believe that their gloomy mood is driven less by immediate financial difficulties than by memories of previous economic cycles and a general dissatisfaction with the direction of the market.
Despite the generally optimistic outlook, especially among the younger generation, who have not yet experienced mortgage defaults or serious recessions and still believe in career advancement, the reality of the housing market is a serious challenge. Even among Generation Z, more than 41% report that housing has become more difficult to afford in just the past few months, a concern that is well-founded as the Spanish housing market shows no signs of recovering anytime soon. In 2024, the average price of a house in Spain reached an unprecedented €2,086 per square meter, exceeding even the peak values before the collapse of the last housing bubble.
This relentless escalation has seen prices rise by a further 12.3% in the first quarter alone, more than double the eurozone average of 5.4%. While 2023 saw the highest number of home purchases since 2007, fuelled by post-pandemic demand and robust economic growth, the market has cooled significantly since then, leaving many potential buyers struggling to raise a down payment or secure a mortgage in an environment of persistently high interest rates. The rental market is no safe haven either; soaring rents coupled with a severe supply shortage mean that housing costs are often beyond what most young working people can afford, increasingly forcing them to opt for unstable rental arrangements, subletting or long-term living in their parents’ homes, according to a new study.
Pessimism about the current economic situation, particularly in the housing sector, has cut across all income levels and age groups, according to the new research. The perception of the housing market is particularly bleak, with only a tiny proportion of respondents (12.4% of the upper middle class, 8.2% of the broad middle class and 9.4% of the working class) noting that more people in their area are buying homes, while more than four in 10 respondents across all economic categories have seen access to home ownership in their communities decline.
There are slight differences geographically, with larger cities such as Madrid and Barcelona showing slightly more optimistic sentiment (11.3% seeing an improvement) compared to smaller cities (9.4%), but the overall trend remains negative, with more than 44% of residents in all types of municipalities reporting worsening conditions for buying a home. The 5D Barometer, which tracks perceptions of personal finance, confirms these concerns, with the housing sector scoring just 31 in the latest quarter (April–June 2024), the lowest of any category and bordering on serious concern (below 30). By comparison, the employment rate was 42.9, while the overall economic climate index remained relatively stable at 46.3, clearly indicating that deep pessimism is reigning in the housing sector.
The current rise in house prices in Spain is no longer the result of speculation, but rather of a chronic shortage of supply, making a return to optimism unlikely without serious structural reforms. And while younger generations may still harbor “romantic” notions of home ownership, harsh reality is quickly dispelling these illusions. The ability of policymakers to change these sentiments depends not only on general trends, but also on specific actions: without a significant increase in the supply of affordable housing and a clearer path to purchase for young and low-income buyers, pessimism may soon become the only truly intergenerational feature of the Spanish property market.