Wednesday, 18 October 2023, 18:18
Personal finance experts do not recommend spending more than 30% of the household income on paying the rent or a mortgage. But Malaga province, together with the Balearic Islands, has the highest rental expenditure in the country, with 49% of the average income going on paying the rent. That is according to a study carried out by the real estate portal Idealista, analysing the annual share of the average net household income that goes towards paying rent for a typical two-bedroom home. This rate has skyrocketed in the last year due to the escalation of property rental prices in the province: in September 2022 the average monthly spend on rent was 38% - a rise of 11% in just twelve months.
After Malaga and the Balearic Islands, the provinces that require the greatest proportion of average income to rent a home are Barcelona (41%), Alicante (35%) and Las Palmas (35%). At the other extreme are Teruel (16%), Palencia (17%), Ciudad Real, Lugo, Zamora and Huesca (19% in all four cases). The Spanish average is 31%.
Figures for cities show that Malaga is the fourth in the national ranking, with 37% (up 6% in the last year) of income going towards rent, following Barcelona (43%), Palma (42%) and Valencia (39%). After Malaga come Alicante (35%), Madrid (33%), Las Palmas de Gran Canaria (30%), Bilbao (30%) and Santa Cruz de Tenerife (30%).
In the case of home owners, the stress ratio is calculated as the annual share of net household income that goes towards paying a typical mortgage in terms of duration and interest rate. In Spain, on average, it stands at 21% of household income. This percentage has increased by four per cent compared to September 2022. Four Spanish cities have exceeded the 30% expenditure ratio recommended by experts for the first time. These are Palma (47%), San Sebastian (38%), Malaga (33%) and Barcelona (32%). The lowest rate is seen in Jaén (11%), Lleida (12%), Ciudad Real, Teruel, Palencia and Murcia (13%).
The increase in the proportion of average income needed to pay a mortgage has been particularly high in Malaga city, up 11% in the last year. Only Palma has registered a greater increase (of 18%).
If the analysis of mortgage payments is carried out by province, Malaga is in second position in the national ranking with 43% of the average income per household. The first is the Balearic Islands, with 45%, followed by Santa Cruz de Tenerife (34%), Alicante (28%), Las Palmas (25%), Madrid (24%) and Cadiz (23%).
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