The net wealth of Spanish families increased by 4.6% in 2020, the year of the pandemic, according to the Bank of Spain
The net wealth of families in Spain (the statistic that includes everything from real estate assets to pension funds or shares) increased by 4.6% in the year of the pandemic, in 2020, up to 122,000 euros, compared to 116,600 2017, as stated in the 2020 Household Financial Survey published today by the Bank of Spain. This paper analyzes the changes that occurred in the financial situation of households in these four years. For its part, average wealth (the difference between the total value of assets and their debts) also increased at a rate of 5.6%, going from 255,500 euros in 2017 to 269,900 euros in 2020, a year in the latter marked by the arrival of the pandemic in Spain. The average income increased by 10.8% in 2019, to 38,900 euros.
Despite these increases, the supervisor’s stat also hides another reality. The one that reveals how the levels of inequality in Spain are “relatively contained” in relation to other countries in the European environment, mainly “because of home ownership, because that helps to mitigate those levels of inequality,” according to the Director General of Economy and Statistics, Ángel Gavilán, who directed this report. Despite this, the richest 10% of the population accumulated 53.9% of the wealth, three tenths more than in 2017; 5% hoarded 41% of wealth (four tenths more), and the richest 1% had 22% of wealth (1.1 points more).
The Bank of Spain shows that housing is the most important asset of families. 73.9% owned a main home in 2020, down from 75.9% in 2017. Home ownership thus loses relative weight in favor of other real estate properties and businesses as net wealth increases. 36.1% of those under 35 years of age owned their main home, a figure that has also been decreasing since 2011. In addition, in 2020, 45.4% of Spanish families owned some financial asset, excluding bank accounts.
The supervisor considers that the increase in family net wealth “breaks the downward trend” shown in the 2011-2017 period, in which a fall of 27% was accumulated, although this increase “hides” “very disparate” variations by groups old.
Thus, the median wealth increased substantially for young households, up to 23,900 euros, for which low levels were observed in 2014 and 2017, around 5,000 euros. Even so, these levels are still “much lower” than those of this group in 2011, which was 72,630 euros. Median wealth also increased in 2020 for households whose head was 65 or older or between the ages of 35 and 44, those whose head was employed, and those whose head was retired.
However, the Bank of Spain warns of the decrease in wealth of those households with lower income. Specifically, the median wealth of families with incomes below 20,000 euros was 40,600 euros in 2020, 15% less than in 2017. In addition, the median wealth among families with wealth of less than 25,000 euros was 400 euros ; when in 2011 this value was 7,100 euros.
Median net wealth also fell for households whose head of household was self-employed, down 5%, and for those where the head of household was unemployed or inactive — which saw a 25% decline in median wealth. in 2020.
Average wealth increased by 5.6%, going from 255,500 euros in 2017 to 269,900 euros in 2020, a year marked by the arrival of the pandemic in Spain. The average income increased by 10.8% in 2019, to 38,900 euros.
As for debt, that of households as a whole represented 11.4% of the total value of their assets at the end of 2020, and 57.1% of households had some type of debt, the highest proportion since 2002 , although the median amount of outstanding debt fell to 33,300 euros, 6.2% less than in 2017.
61.7% of the debt was motivated by the purchase of the main home, with a median debt of 65,000 euros, followed by the purchase of other real estate properties (22.4%) and other pending debts (116%), such as purchase vehicle and other durable goods, home improvement, debt cancellation, and business financing.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.