Spain has long been one of Europe’s most attractive destinations for both residents and international buyers. With its Mediterranean climate, excellent healthcare system and relaxed lifestyle, it continues to draw people from across the continent and beyond. But while Spain still offers a high quality of life, the cost of everyday living has been steadily rising.
Recent consumer spending data shows that the average Spanish household now spends around €21,900 per year on essential expenses. That figure represents roughly two-thirds of the average net salary, meaning most households allocate the majority of their income to basic necessities such as housing, groceries, utilities and transport before considering leisure or savings.
Compared with global cities like London or New York City, Spain remains relatively affordable. However, the cost of living can vary dramatically depending on where you choose to live.
Housing: The Largest Expense
Housing continues to be the biggest factor in household spending. Mortgage holders typically spend around 65% of their income on essential living costs, while renters often face even greater pressure, with basic expenses consuming around 68% of their income on average.
Rent or mortgage payments, along with community fees and maintenance, represent more than half of essential household spending. Grocery bills now exceed €4,000 per year, while electricity and gas together add over €1,200 annually. These everyday costs significantly reduce the amount many households are able to save.
Where Living Costs Are Highest
Some of Spain’s most desirable locations also come with the highest living expenses.
The Balearic Islands rank among the most expensive regions in the country, where housing demand can push essential living costs close to a household’s entire income.
In Málaga, international buyers, digital nomads and remote workers have driven strong rental growth in recent years. What was once considered an affordable coastal city has become one of Spain’s most competitive property markets.
Large metropolitan hubs such as Barcelona and Madrid< also remain among the most expensive places to live due to higher housing costs and daily living expenses. Meanwhile, the picturesque coastal city of San Sebastián consistently ranks near the top for property prices and lifestyle-related costs.
More Affordable Cities in Spain
For those prioritising affordability, several inland cities still offer a much lower cost of living.
Cities like Cáceres, Zamora, Ciudad Real, and Jaén provide significantly lower housing costs and everyday expenses compared with Spain’s larger urban centres.
These locations often offer a better balance between income and living costs, allowing residents to maintain greater financial flexibility.
Why Location Matters
Spain still offers an enviable lifestyle, particularly for retirees, remote workers and international buyers. However, with essential expenses now absorbing a large portion of household income, choosing the right location has become increasingly important.
Coastal and metropolitan areas continue to attract strong demand thanks to employment opportunities, infrastructure and lifestyle appeal. At the same time, inland regions are becoming increasingly attractive for those seeking greater affordability and long-term financial stability.
In today’s Spain, the lifestyle remains exceptional—but where you choose to live can make a significant difference to your financial comfort.