The economic and housing situation currently experienced by young people in Spain does not offer a very promising future. But these new generations have an unexpected trump card: Demographic change and the decline in birth rates in Spain in recent years point to an increasing concentration of wealth. millennial generation and young population through inheritance.

41% richer than the previous generation. study Demography, housing and wealth gaps The report prepared by the Afi Emilio Ontiveros Foundation shows that the transfer of wealth of generation members Baby Boom to millennial generation or subsequent generations will have 41% higher than what they received from the previous generation. This increase in wealth transfer is not just a matter of great wealth, but also responds to factors such as urban and socioeconomic growth and the reversal of the demographic pyramid that Spain experienced between the 80s and 2000s.

The research estimates that people born between 1980 and 1996 will inherit an average of 250,000 euros from the previous generation. While their predecessors inherited an average of 177 thousand euros, the so-called “silent generation” born at the beginning of the century inherited an average of 91 thousand euros.

Immigration and accommodation opportunities. In historical context, between the 60s and 90s of the last century, there was a massive migration movement from rural areas to cities; This movement sowed the seeds for what is now Spain, which was evacuated to concentrate on the major cities. In the 1980s, 27% of the population lived in towns with fewer than 10,000 people, while in 2021 this rate was only 20%.

On the other hand, this migration was accompanied by an enormous housing supply, which grew and formed new neighborhoods that formed the periphery of cities in those years and are now part of the urban core. According to data obtained from the research, the housing stock in Spain consists of 26.7 million houses and their average age varies between 45 and 50. This gives an idea about the construction volume in that period. According to the research, approximately 80 percent of the population Baby BoomBorn between 1958 and 1975, Bay is the owner of one of the houses where he usually resides.

second residence. At the same time, the study shows that, in addition to the construction of main houses in big cities between the 60s and 80s, the rate of second house constructions also increased in touristic regions that have not yet been stressed by the massification of recent years. decades.

This pressure on housing has resulted in many of these secondary homes becoming primary residences or their owners renting them out, an additional economic benefit that will impact the net value of this generation’s inheritance.

Increase in housing prices. The increase in housing prices also makes a significant contribution to the increase in the revaluation of inherited assets. Data from the research shows that the average price of new homes in Spain in 2004 was 140,000 euros, and twenty years later this average price increased to 267,078 euros.

This means that the value of real estate investments made between the 1980s and 2000s has been revalued by over 100% relative to the current market price, and therefore the valuation of inherited assets has also increased.

Importance of birth. One of the main factors for this increase in the transfer and concentration of wealth to the millennial generation is the decrease in the number of births. Birth data in Spain shows that the birth rate in the 1960s was 21.70%, with 2.86 children per woman. While this rate was 15.22% with 2.21 children per woman in the 80s, it coincides with the period when the first child was born in the late 90s. millennial generationThe birth rate dropped to 9.39% with 1.16 children per woman.

This means: generation Baby Boomers While he had to distribute his inheritance among an average of four to two siblings, the distribution of this inheritance among siblings also millennial generation It will be concentrated between one and two siblings, in addition to the fact that many couples choose not to have children, increasing their options for inheriting from third-degree relatives (e.g. uncles).

Inequality continues to exist. Although the study does not give specific figures, it emphasizes that this concentration of wealth is in the hands of the rich. millennial generation It will contribute to widening the wealth gap between rich and poor.

The root of this increasing inequality lies in the accumulation of real estate properties, which have increased the most in recent years, in strategic locations or with larger construction areas. Those without families who own one or more homes will continue to be at a disadvantage.

in Xataka | If asked how much money can be donated to a child without reporting to the Treasury, the law clearly states this: none.

Image | Unsplash (Roma Synkevych)