In A Year, Spain Has Lost 80,000 Households

The barren homes and abandoned housing developments that dot Spain, symbols of the collapsed construction bubble that has crippled the country’s economy, are also concrete manifestations of an ongoing demographic shift, as the unemployed young leave the country or move back in with their retired parents to save money and share the retiree pension.

There are those who pack their bags and emigrate to another country, others who pack up and return to the country they came here from, and others still who head back to their parents’ home or who try to move in with roommates. The crisis has altered the map of home life in Spain, and in the last year more than 80,000 households have disappeared, as a consequence of population decline and return to family homes. At the end of the third quarter of this year, there were a total of 17,391,000 households, a drop of 48,900 compared to the previous quarter, and 80,000 less than in September of last year, according to the latest data from the Labor Force Survey.

The decline in family units is an anomaly in the statistical series of the Spanish Statistical Office [INE]: the number grew continuously since at least the beginning of 2005, and saw its first drop near the end of the first recession of the current economic crisis at the end of 2009 and the beginning of the following year. It then began to grow again until the end of 2012, when it suffered a small drop, the latest plunge, recorded by the labor force survey last week, is the biggest on record.

“All of us know people who have moved back in with their parents because they lost their job and could not support themselves anymore. But on top of that, there are all of these households that were never created in the first place because of young people who, for example, never had the resources to leave their parents’ homes in the first place,” says Angel Laborda, interim director of the Savings Banks Foundation [FUNCAS].

Fifty-three percent of those younger than 25 are unable to find work, and for those 25 to 29 years old, the unemployment level is 33 percent. Overall, nearly 26 percent of the economically active population of Spain has no way to earn a living, a situation which has forced many families and individuals unable to pay their rents or mortgages to move in together.

The number of homes with a head of household who is retired has continued to grow since the beginning of the crisis. The tendency of many people to return to their parents’ home is visible in the number of pensioners who are housing the unemployed: this figure has doubled since the crisis began. Concretely, the number of homes with a pensioner as head of the household reached 3.1 million at the end of September, 64,200 more than a year ago. Among them were 313,800 who were housing one or more unemployed people, and increase of 22,000. In 2008, there were less than half as many households in this situation: 129,900.

The increase is striking when studying in detail these homes where the head of the household is a retiree: there are 42,400 such households with two unemployed people living in them: four times as many as there were in 2008. And 5,200 such households have more than three unemployed members, compared to 2,700 five years ago.

Retirees have definitively become one of the final safety nets for the nearly 6 million unemployed people in Spain.

spain-immo221Urban art, Valencia. Photo CC: Antonio Marin Segovia

The barren homes and abandoned housing develMigration has also had an effect on the shrinking number of households; in 2012, Spain registered its first population decline since at least 1971, when the ` began collecting statistics. The country lost 113,902 inhabitants, 0.2 percent of the population. Beyond the balance of births and deaths, the number of immigrants dropped by 2.3 percent, to 5.1 million, while the number of Spaniards living in other countries increased by 6 percent, reaching 2 million.

Fewer consumers implies smaller domestic demand in the Spanish economy, but the effect family reunification is uncertain, in the opinion of Jose Garcia Montalvo, professor at Pompeu Fabra University. “The savings to be had when an unemployed person moves back in with his parents, for example, imply smaller expenditures on housing, rent, etc. But at the same time that leaves more available to spend on other types of goods and services,” he says. FUNCAS’s Laborda points out that what does indeed suffer, necessarily, “are all of those expenditures related to housing.”

Montalvo says the latest numbers from the labor force survey are useful for understanding the overall trend, but he says the precise figures should be treated with caution, since they are not from statistics specifically designed to measure households. During the era of economic growth, he points out, the speed at which new households were being created-increasing by half a million a year, helped along by a wave of immigration-was used to justify the voracious pace of new home construction and to quiet the voices trying to warn of a housing bubble.

Amanda Mars