Spaniards have long regarded themselves as “a nation of homeowners.”

A little over three-quarters of Spanish households (75.30 percent) own their property while the remaining quarter live in rented accommodation, according to dataset figures from Trading Economics.

But things are changing in Spain. The sorts of Spaniards who bought up all that property in the past, namely the Silent and Baby Boomer generations, are retiring, already retired, or, to put it bluntly, dying. 

It’s hard to overstate just how dominant these older generations are in terms of home ownership in Spain. 92 percent of households with an adult over 65 own a home according to Eurostat and La Caixa figures published in Libre Mercado.

For younger Spaniards, on the other hand, rising prices mean it’s becoming more difficult to rent a property, let alone buy one.

Whether they’re retiring or dying, this generational shift is having a significant impact on the number of property inheritances which in turn could have several significant ripple effects on Spanish society and its property market in the medium-term future.

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Rising inheritances

The number of inherited homes has been rising consistently in Spain since 2007. Before the 2008 financial crisis, inheritance contributed to around only one in ten total property transactions in Spain. 

By 2024 that figure had increased to one in five. The peak was reached in December 2020, at the height of the pandemic when lots of older people were dying and almost one in four homes were passed on via inheritance.

Long-term property owning generations dying out is the main explanation, but declining birth rates also mean that many Spaniards may now inherit property from aunts and uncles that never had children and therefore increase inheritances numbers overall.

This rise in inheritances is having several impacts on Spanish society.

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Worsening rental market

If you’ve followed The Local’s extensive coverage in recent months, you’ll know that the rental market has been a hot topic of conversation in Spain.

Frustration with rising rental costs has also underpinned a lot of the growing anti-tourism sentiment in Spain’s protest movements in recent months. You read our coverage of that here.

But increasing rates of property inheritances also serve to worsen the rental market by reducing the stock. According to data compiled by Fotocasa Research, 21 percent of homes for sale and 10 percent of homes for rent on the market are inherited. 

Many who inherit properties from family members prefer to sell in order to get a quick cash injection, but also to avoid the administrative challenges and responsibilities that come with being a landlord, further depleting the already dwindling rental housing stock in Spain.

Widening class and generation gap

Rising inheritances also widen class and generational gaps.

According to data from a Banco de España survey, the percentage of households with “young owners” has fallen by a staggering 37 percent since 2011, going from 69.3 percent to 31.8 percent.

With young people increasingly unable to even afford a rented property during their most productive working years, let alone purchase a home, millennials and Gen Z Spaniards could face financial uncertainty well into their 40s. 

No data is yet available on how increased inheritance rates will affect inequality among Spanish millennials specifically, but looking at global trends it seems it will almost certainly widen inequality within the millennial generation as those inheriting become very wealthy very quickly while the rest don’t.

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A Financial Times report found that the richest 10 percent of the millennial generation is already far richer than the same cohort was in the baby boomer generation. Pedro Salas Rojo, a researcher at the London School of Economics, told El Periódico de España that rising inheritances generally mean that “one group of the population acquires wealth very early and another takes a long time to reach that level.”

What seems clear is that as inheritances pass from baby boomer parents to lucky children, a class divide is opening up between those with parents who were able to buy property in the past and those without. Often these properties were bought very cheaply, relatively speaking, thirty or forty years ago, and can then be sold for ten times that (or more) in 2024.

A lazy generation?

However, some fear that the growing numbers of properties being inherited could create a so-called ‘lazy generation’.

Luis Ayuso, Professor of Sociology at the University of Málaga, told El Periodico that as more and more people inherit properties and therefore large sums of money, notions of hard work and meritocracy could be in danger: “The first constitution of the United States said that the state had to keep an eye on large landowners and the inheritance system because that can produce lazy children.”

“Inheritances can result in the next generation not having to work. If you are an only child and you inherit a flat in Madrid, you may not have to work,” he adds.

With Spain’s property owning generation due to die in the coming years, not only could the class divide widen but there could be a lot of lucky (or lazy) Spaniards who suddenly come into a lot of money very quickly.

Of course, lucky though they are to be in position to inherit property, the fact that doing so is for many Spaniards their version of the ‘bank of Mum and Dad’ is no great reflection of Spanish society. What does it say about the Spanish property market that many Spaniards can only access it when their loved ones die?

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