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Spain’s teens failing in financial literacy stakes

A new survey of financial literacy shows one in six Spanish teens have only the most basic level of understanding when it comes to money matters.

Published: 9 July 2014 11:53 CEST

The latest revelations from the Pisa 2012 education study, carried out by Organization for Economic Co-operation and Development (OECD), shows major differences in the abilities of 15-year-olds to grasp money matters in 18 countries around the world.

Students were asked to perform a range of tasks from basic problems, such as interpreting the information on a bill, to more complex ones like being able to understand taxation law, the daily El País reports.

Chinese students from Shanghai – the only part of the country where schools participated – came out top in the financial literacy test with an average of 603 points per student, followed by Belgium, Estonia, Australia and New Zealand, which were all well above the Pisa average of 500 points.

Spain, on 484, was below average, although it was slightly ahead of Italy, which scored 466.

Spain’s score was similar to those obtained in other previously published sections of the Pisa 2012 survey, in which Spanish students averaged 488 in reading, 496 in science and 494 in mathematics. The report does mention that the financial literacy results were “especially low” among students who had obtained a good score in mathematics.  

Speaking about the results on Wednesday, Spain’s secretary of state for education, Montserrat Gomendio, pointed out that “after the economic crisis we have had and which we are starting to emerge from, it is important that citizens have an understanding of how the national and global economies work so that they understand the repercussions”.

Gomendio also said that teenagers today face new and greater financial challenges as they deal with “credit cards and prepaid mobile phones”.

According to the report, 59 percent of Spanish 15-year-olds have a bank account and 41 percent earn money doing odd jobs during holiday periods.

The education reform being introduced by Spain’s Popular Party government mentions the need to include financial matters in the school curriculum.

“Young people on the brink of adulthood are poised to make complex financial that will have an impact on the rest of their lives. Results from the PISA 2012 financial literacy assessment show that many students, including those living in countries that are high-performers in the main PISA assessment, need to improve their financial literacy,” the report’s authors say.

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PROPERTY

Is buying a property to rent out to tourists in Spain too risky now?

The quick return on investment for buying a holiday let in popular Spanish cities and towns can be very appealing, but there are increasing signs that the money-making scheme could come to an end soon. 

Published: 10 September 2024 10:32 CEST
Is buying a property to rent out to tourists in Spain too risky now?

Regardless of what you think are the causes of Spain’s housing crisis, one thing is clear: short-term holiday lets are up to four times more profitable than long-term rentals. 

Just how remunerative they are can depend on many factors (occupancy rate, location etc), but according to Spanish property portal Housfy, a tourist let provides an average net profit of 15 percent a year.

With this in mind, it’s no surprise that tourist apartments have proliferated across the country: 9.2 percent alone in the last year, which adds up to around 60,000 new ones.

As Spain welcomes more and more tourists (84 million in 2023, a record that looks set to be beaten in 2024), you’d expect the goose that laid the golden eggs to continue plugging away.

However, the simmering resentment from disgruntled residents who blame mass tourism and holiday lets for their spiralling rents does appear to be having an impact. 

OPINION: Spaniards should blame landlords, not tourists

There is currently no outright nationwide ban in Spain on Airbnb-style lets, but a growing number of small towns and big cities have taken action in recent weeks and months. 

From Dénia on the Costa Blanca to Pamplona in the north, municipalities across Spain are introducing temporary moratoriums on new licences for tourism apartments, which should in theory prevent new ones from popping up (there are tens of thousands of unlicensed holiday lets, especially in Madrid). 

READ ALSO: Which cities in Spain have new restrictions on tourist rentals?

Barcelona authorities have perhaps taken the toughest approach so far, as their mayor Jaume Collboni actually said there will be no more tourist rental flats in the Catalan city by 2028. 

READ ALSO: Can Barcelona really ban all Airbnbs?

So is it possible to envision a future where holiday lets are not allowed in Spain? And if so, would it be better for small and big investors to ditch plans to buy a Spanish property if the primary purpose of it is to let it out to tourists?

Hatred of holiday lets is on the up in Spain, the world’s second most visited country, prompting authorities to try and reconcile the interests of locals and those invested in this lucrative sector. (Photo by OSCAR DEL POZO / AFP)

Spain’ Housing Minister Isabel Rodríguez has on several occasions hinted at the need to “regulate tourist flats” rather than banning them entirely, although in July she did say “if we need to ban tourist flats, we will; if limiting them is enough, we’ll limit them”.

There’s been talk of legislation to ban holiday lets in residential apartment blocks, as well as putting a stop to temporary accommodation (longer than short-term lets but shorter than long-term rents). 

But in truth, things are moving slowly and the Spanish government appears to be somewhat sitting on the fence regarding restrictive measures, all too happy to pass the buck to the regions and individual town halls. 

There is clearly an awareness of all the vested interests in the holiday let industry, that not all landlords own a dozen properties, and even the legal implications of banning citizens from doing as they please with their assets.

What does seem clear is that city centre properties and those in the popular old quarters of Spanish cities and towns are most likely to be limited by local regulations, at least temporarily.

The same applies to tourist flats in residential buildings, as there is currently an amendment in the pipeline which would give communities of neighbours the power to veto new holiday lets in their blocks. 

Therefore, investors should consider whether properties that fall in these categories are future-proof in terms of short-term letting, and whether they’ll have to swap over to long-term letting at some point.

Spain’s latest Housing Law, which came into force in 2023 and sought to stop long-term rents from increasing, has actually led many landlords to either find loopholes or take their properties off the market. 

READ MORE: Why landlords in Spain leave their flats empt rather than rent long-term

With more demand and less stock, rents have logically continued to increase in 2024.

The legislation has clearly backfired, and with a boost in social housing a very long-term solution, Sánchez’s government may be forced into a corner and have to act vis-à-vis holiday lets if the situation becomes more untenable. 

READ MORE: Has Spain’s Housing Law completely failed to control rents?

A blanket ban is unlikely, as short-term rentals in more rural locations with fewer inhabitants have less of an impact on rents.

But buying a property in Spain in a central or sought-after residential area in Spain (especially in an apartment block) with the sole purpose of letting it out to tourists, now appears to have its risks as a long-term investment.

READ ALSO: VUT, AT or VV? Why Spain’s holiday let categories matter to owners

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