Housing costs put 1.95m into hidden poverty
Housing costs are exposing hidden poverty in the Balearic Islands, which a new study lists among Spain’s most pressured residential areas. Across Spain, about 1.95 million people fell below the poverty line in 2025 after paying for access to housing, despite not being counted as poor under the usual cash-income test. The Fundación de Estudios de Economía Aplicada (Fedea) published the study on Wednesday.
The report draws on microdata from the National Statistics Institute’s Survey of Living Conditions. Spain’s conventional relative poverty rate stood at 19.5% in 2025. Once housing access costs were taken from income, it rose to 23.5%.
Market-rent tenants carry most of the burden
The sharpest impact falls on people renting at market prices. Their share of the population grew from 12.1% in 2014 to 17.4% in 2025, the report says.
Among those tenants, 32.8% were classed as poor before their rent was counted. That figure climbed to 49.9% after the rent actually paid was deducted. Fedea says one in four market-rent tenants who were initially above the threshold drop below it after paying rent.
Market-rent homes account for 72.5% of the 1.95 million hidden-poverty cases. The study identifies households led by a young person born outside the European Union as particularly vulnerable, especially in pressured areas including Madrid, the Balearic Islands and Catalonia.
Why income alone misses the strain
The standard income measure picked up only 46.7% of people facing severe material and social deprivation in 2025. Including housing access costs lifted that to 56.9%; counting total housing spending raised it further to 66.1%.
The report also considers the financial advantage of owners who do not pay market rent. When that benefit is included, around 3.38 million people regarded as poor on their cash income alone would no longer meet the definition. The effect is mainly seen among older homeowners without a mortgage, though the researchers stress that it does not give those households more cash.
Fedea says income on its own cannot show how differently households fare after meeting their housing bill. Its authors call for housing costs to be explicitly included in income-support policies such as the Ingreso Mínimo Vital, so help better reflects what people have left after paying for a home.
Source: Europa Press / Mallorca.com