I have read on this and other sites that a well paid Spaniard is earning around 25,000E per year. Some of you have read on other forums that I am in the process of selling the business that I started, so myself and Mrs. Dweller are looking around for a place for a second home. I have been doing research for the prices of real estate in Spain and bearing in mind the income level that I have read about, how are average Jose and Maria affording to purchase their own home?? Or am I just not looking in the right places? On a side note to this issue, I have noticed that there are some castles for sale both in Spain and other areas of Europe.The list price is a little more than I had in mind, and most are listed as needing work.

dd--
As someone who is looking at buying a house and earns about that level here in Madrid, I continually ask myself the same question.

One thing that you should keep in mind is that generally people live in much smaller houses/flats than one would in the USA. So, if you are looking for something comparable to your house in the States, you will find that the price is surprisingly much higher here. I have friends who have a single home on an acre of land in a very good neighborhood in suburban Philadelphia (the Main Line for those familiar with Philadelphia). Their property, with 4 bedrooms 2 bathrooms and a finished basement, is valued at about $500,000. You couldn't touch a property like that here in suburban Madrid in a comparable neighborhood for under $1 million euros....just to give you an idea.

How do people do it? Most young professionals live at home until they get married (and the marrying age is later and later like in the States... early to mid 30s). They save up their money (don't have monstruous student loans like a college grad in the States), and then put a hefty down payment on their home with help from Mom and Dad...then, they take out a 30-40 year mortgage. There is a high premium placed on homeownership. Renting is not as popular ... nor is the independent lifestyle that is so valued in the USA.

Well paid...may be above average, I wouldn't say that well paid. I consider "well paid" some like 36000€.

Chica writes: You've been away too long, Chica: Haven't you heard anything about the Housing 'Bubble?' The MainLine property you described would now fetch at least $750,000 (which is what my daughter recently paid for a home in southern Chester County).

Desert Dweller: You might find a 'Piso' further from the center of Madrid: Leganés or Getafe, SW or Alcala de Henares or Guadalajara, NE for less than 1-million Euros but you probably won't find a single family home in any of those areas for that kind of money. My sister-in-law's brother is a Bank President: they live in a Colonia in Torrejon de Ardoz (about 25-mi from downtown).

Or, with some luck (and patience), you could find a piso in an older section of Madrid. Not too likely because these properties are passed down from Generation to Generation. My wife's aunt owned a piso on c/Claudio Coello when her (the aunt's) mother (wife's grandmother) was still alive - it passed down to wife's cousins, their children and their children's children. Wife's other Aunt lived in a piso on c/Arrieta (near the Palacio Réal). They sold it for 11-million Pesetas (about $5.5-million at the time) and moved out to a Colonia near Barajas.

If you are looking for a 2nd home, it may be better to choose somewhere a long way from Madrid or Barcelona. Perhaps look in the vicinity of places like Teruel, Soria, Albacete, Palencia or even Valladolid. You should then be able to buy something one third of the price of a Madrid dwelling. It's also a shame that the closer you go to the coast the higher the price. However in a good coastal location you may be able to rent a place out for most of the time you are not in residence.
Good luck in your research!

Dear DD et al,
Just a short note, 11 million pesetas is not now nor has it ever been any where near 5.5 million US Dollars. It is actually, even at todays higer Euro values closer to USD 50,000.00. That aside, there is not much difference in house prices in what constitutes the centre of Madrid, perhaps with one or two exceptions being perhaps the barrio Salamanca and in or around the calle Genova where some prices have actually approached and exceeded the absurd price levels of up to €10,000.00 per square metre!
In general you will find that the price per square metre is rather consistant throughout the city centre. If you are content and willing to live in a rather far-flung and dull suburb of Madrid it is possible to find less expensive housing, thus the exodus of many young couples further from the centre. Apart from the property boom and rampant speculation (almost a full 30% of available housing stock is vacant in the historic city centre of Madrid as speculators hold back potentially available and habital housing from the market hoping to make a killing. As it is easier in Spain where tenants still have a modicum of tenancy rights, to sell an empty house or flat rather then one which is occupied and subject to restrictions) making it increasingly difficult for many people to buy a place in which to live. There are of course the very low wages to add into the equation (according to the latest EU statistics regarding wage levels through out the union almost a full 20% of adult Spaniards live on less then €350.00 a month). One of the solutions (or aiding and abetting price speculation, depending on your camp)which Spanish banks have come up with recently to help promote home ownership is to offer 100% mortgages, interest only loans, 30 and 40 year mortgages and even some with no payments at all for the first year or longer. However, to avail of these you will need to be a Spanish citizen with a lot of quaranties (a job with a good contract, two income household, and someone to go guarantor for the duration of the loan) or at least be an EU citizen both working and residing in Spain. As many northeren europeans wish to retire to the "sunny south" there has been tremendous preasure on the cost of housing and even many hitherto uninteresting or out of the way places have seen uncommon price rises in the last five or six years. But with a bit of diligence and intrepidity it is still possible to find both affordable and interesting housing in the centre of Madrid and throughout Spain in general. And also good news for the buuyer-as housing becomes so very high in relation to wages, and the property market is begining to stall as the pool of buyers becomes smaller and people say "¡basta, ya no pude mas!" prices are actually beging to fall in Madrid-indeed the world bank has issued formal warnning to the Spanish central bank that Spanish property is overvalued by 30% in general and by as much as 60% in some parts of Madrid and Barcelona. So if you are patient and have ready money in the bank you may actually be able to find that perfect place in the sun, that you and it would seem everyone else have always dremed of.
Just a last, I think rather interesting note: it is true, you will have to acustomise yourself to living in a smaller place. Just after the Second World War the average American family of four lived in a house of approximately 850 sqft. growing to 950 sqft. in 1960, 1,100 sqft. in 1970 and now a whopping 2,500 sqft. So it would seem that along with the size of most Americans and spending-power their expectations for minimal living space has ballooned.

Thank you one and all. I was surprised to find out that the cost of housing was so high in Torrejon. When I was stationed there in the early 70s, a nice piso could be rented for about 4mil. I remember signs in Metro stations with Sophia Loren as the ad hostes with new pisos for the equivalant of $25,000. I thought at that time, "what fool would pay $25,000 for a condo?" Ahh the infinte level of intellegence of youth.

One suggested that I rent the house while not living there. We own rental properties in the Phoenix area, and I can assure you that Mrs. Dweller would not be warm to the idea of renting out our second home. Unless one could demonstrate to her, that Spanish tenants are different than American tenants that would not happen.

The area of Gettafe was a "blue collar, industrial" area when I was there in the '70s. Has that all changed or have the prices just gone up that radically?

By the way some of those castles that are listed in Spain and other counries must need a lot of work. The prices that you people are telling me about for a house/condo in Madrid is what some of those are going for. Maybe the Desert Dweller could start a second career of rehabbing Europeon castles. The rehab and resell business has been good to us here in Arizona.

Be sure and change your name to Castle Dweller!

Unless, you absolutely must live in or near Madrid, have you thought of dwelling in other provinces? Also have you thought of buying the land and then building your own place?

I also have dreams of retiring in Galicia, and my cousins, who are in construction, have adviced me to buy the land and then build a place myself. I am still pondering on that idea.

Desert dweller,I suggest you buy yourself a castle....in Transylvania.I hear Dracula is selling cheap cuz his castle needs plenty of work (it's hundreds of years old).And you might even find that his coffin will fit you....hehehe

Also, make sure that you have plenty of guest rooms.People like Bill from NYC,the Booklady,Gazpacho,Fernando et al might be frequent visitors!!!....hehehe

Booklady: You do not want Mrs.Dweller to get going on the subject of me building our own house. That is what I am doing in Northern Az.now. This past week the rough electric was put in as was the rough plumbing. Next week the Heat and Ac, then will call for inspection on those three so I can get the dry wall on before the 1st of the year.

You are smart enough to build your own house. Check out of your own library Living the Good life by Helen and Scott Nearing. Also Building Stone houses By Earnest Flagg. Not sure of the title on the one by Flagg.You may have to order the oneby Flagg on inter library loan. Both will deal with Stone House construction. Just remember one of your fellow Floridians built her own house, if that idiot Janet Reno can do it I know that Booklady can do it.