Lorraine Williamson
Spain’s housing shortage has reached an estimated 750,000 properties, leaving construction unable to keep pace with the number of new households forming across the country.
Economists now expect property prices to continue rising by at least 5% a year, maintaining pressure on buyers and tenants even as the extreme increases recorded during recent years begin to moderate.
The figures point to a housing problem that has become structural rather than temporary. Demand remains concentrated in Madrid, Barcelona, Málaga, Valencia and other cities offering employment and services, while planning delays, limited developable land and years of insufficient construction continue to restrict the number of homes reaching the market.
Prices expected to rise by at least 5% a year
The Consejo General de Economistas expects Spanish property prices to increase by at least 5% annually during the coming years. That would represent a slowdown from recent rises of between 10% and 12%, but would still leave Spain well above the European Union average of approximately 3%.
Economists warn that a slower increase does not necessarily mean the housing crisis is easing. Prices would still be rising faster than many household incomes, while the gap between the number of homes required and those available would continue to widen in the most sought-after areas.
The conclusions were presented in the organisation’s financial observatory report covering the first half of 2026. The economists identified inadequate supply and population growth, including demand associated with immigration, as two of the main reasons prices are expected to remain elevated.
Where does the 750,000-home shortage come from?
The figure represents the accumulated difference between the number of new households created in Spain and the number of homes completed between 2021 and 2025. The Banco de España increased its estimate to approximately 750,000 homes in its latest annual assessment of the market.
Spain has experienced strong population and household growth, but residential construction has remained far below the levels seen before the 2008 financial crisis. The shortage is particularly severe in Madrid, Barcelona, Málaga and other provinces experiencing rapid population growth and sustained demand.
The Banco de España has identified limited land availability, slow administrative processes, low construction-sector productivity and an insufficient supply of public housing as important barriers. It has also warned that the shortage can restrict labour mobility, because workers may be unable to afford accommodation close to available jobs.
New households outnumber new homes
More than 1.2 million households were created in Spain between 2021 and the end of 2025, according to recent housing-market analysis. Construction has increased, but nowhere near quickly enough to provide a home for every new household while also reducing the shortage accumulated during earlier years.
Recent building figures remain well below pre-2008 levels. Developers face long waits for planning permission and licences, while shortages of skilled workers and rising construction costs can make some projects difficult to complete profitably.
The problem is not distributed evenly across Spain. Some rural and inland areas have empty housing, while the greatest shortages are concentrated in cities, coastal regions and economically active areas where people most want or need to live.
This means the country cannot resolve the crisis simply by counting all existing properties. A vacant house in a declining inland village does not necessarily meet the needs of a family working in Madrid, Málaga or Barcelona.
Population growth adds to demand
Spain’s population growth has supported the economy and helped employers fill vacancies, but it has also increased housing demand in areas where the available stock has barely expanded. New residents tend to settle close to employment, transport, schools and public services, placing further pressure on the same urban and coastal markets that already face shortages.
Madrid, Barcelona, Málaga and Valencia are among the clearest examples. All attract workers, students, international residents and businesses, but new housing development has not kept pace with the rate at which households are being created.
The result is not that migration alone has caused Spain’s housing crisis. The underlying problem is that a growing population is entering a market where construction has been insufficient for years and where public and affordable housing represent only a small proportion of the total supply.
Economists argue that continued population growth will keep demand strong. Unless the supply response improves, competition for available homes is likely to remain intense, and prices will continue to rise faster in the most attractive locations.
Spain housing crisis: why new homes are still delayed
Buying requires around eight years of salary
The financial effort required to purchase a home has increased sharply. According to the economists’ report, the average purchase price now represents approximately eight years of gross salary, compared with around four years during earlier periods.
This does not mean a household can buy a property simply by saving every euro earned for eight years. Buyers must still meet daily living costs, accumulate a deposit, pay taxes and fees, and satisfy a bank’s mortgage-affordability requirements.
For many younger households, saving the initial deposit is one of the greatest barriers. Even where monthly mortgage repayments might be manageable, buyers commonly need savings covering at least 20% of the purchase price, together with associated taxes and expenses.
Rising prices make that target move further away. A household saving at a steady rate may find that the deposit required has increased again before it reaches the original amount.
Tenants face the greatest pressure
The rental market is creating an even greater affordability problem for lower-income households and people who cannot access a mortgage. The report says that four in ten households renting at market prices spend more than 40% of their gross income on rent.
That figure should not be interpreted as meaning that every Spanish household spends 40% of its income on housing. It refers specifically to the proportion of renting households whose rent exceeds the 40% affordability threshold.
The Banco de España has previously identified Spain as one of the European countries where lower-income tenants face the greatest financial burden. Tenants often have fewer alternatives because high purchase prices and deposit requirements prevent them from moving into home ownership.
Rising rents can also make it harder to save. Households may spend such a large proportion of their income securing their current accommodation that they cannot build the deposit needed to leave the rental market.
Young people struggle to form independent households
The shortage affects more than property prices. It changes when and where young adults can leave the family home, whether couples can start families and whether workers can move to take up employment.
Many younger people remain with parents for longer, share accommodation or move farther from employment centres to find affordable housing. Others accept small rooms or temporary contracts because conventional long-term rentals are beyond their budget.
This can create wider economic effects. Businesses may struggle to recruit staff in areas where wages do not cover local rents, while essential workers can be pushed farther away from hospitals, schools, hotels, restaurants and other workplaces.
Housing shortages therefore affect economic competitiveness as well as household finances. A city may create employment, but that growth becomes difficult to sustain when workers cannot afford to live within a reasonable travelling distance.
Málaga among the most pressured markets
Málaga has experienced some of Spain’s most intense housing demand, driven by population growth, employment, tourism, international investment and the arrival of technology companies and remote workers.
The wider province also has a significant holiday-home and short-term rental market. Although tourism is not the only reason for the shortage, competition between residential, seasonal and visitor accommodation can reduce the number of homes available to long-term tenants in particular neighbourhoods.
Similar pressures can be seen elsewhere along the Mediterranean coast and on the islands. Residents earning local salaries are often competing with buyers or tenants whose incomes come from wealthier international markets.
The housing shortage is therefore felt differently across Spain. In some cities, the greatest pressure comes from employment and population growth; in tourist areas, it may be intensified by seasonal use, second homes and short-term accommodation.
Why is Spain not building more homes?
There is no single explanation. Developers frequently point to the shortage of land that is fully approved and ready to build on, together with lengthy planning and licensing processes.
Local authorities may take months or years to approve projects, while construction companies face shortages of skilled labour. Material costs, financing conditions and uncertainty over future regulation can also delay investment.
Housing development requires coordination between local councils, regional governments and the national administration. Land must be planned, infrastructure installed, licences granted and construction financed before a property can reach the market.
The shortage of public and social housing further limits the alternatives available to people excluded from the private market. Spain’s public housing stock remains small compared with that of several northern European countries, making it harder for government programmes to relieve pressure quickly.
Economists call for supply-side reforms
The Consejo General de Economistas has called for planning and licensing procedures to be accelerated, construction methods to be modernised and the availability of land to be reviewed. Its proposals also include changes to taxation and measures intended to make residential development more attractive.
Industrialised and modular construction could reduce building times, but it cannot remove delays relating to land, licences and infrastructure. Economists therefore argue that increasing supply will require action across several parts of the housing system rather than one isolated policy.
Measures to protect tenants or limit prices may provide relief to some households, but economists repeatedly warn that regulation alone cannot create the hundreds of thousands of homes the country lacks.
Any increase in supply will also take time. Even when a new development is approved, several years may pass before homes are completed and occupied.
No rapid end to Spain’s housing crisis
The estimated shortage of 750,000 homes cannot be closed within a single year. Spain would need to build enough properties to meet continuing household growth while also completing additional homes to reduce the accumulated deficit.
That challenge becomes more difficult when construction is concentrated away from the areas experiencing the greatest demand. New housing must be connected to employment, transport and public services if it is to relieve pressure effectively.
For buyers and tenants, the economists’ forecast suggests there may be little immediate relief. Annual price growth of 5% may appear moderate compared with the steepest recent increases, but it would continue reducing affordability if wages fail to rise at a similar pace.
Spain’s housing market is not simply experiencing another short cycle of rising prices. The growing population, limited construction, lengthy approval processes and shortage of affordable homes have combined to create a structural problem that will require years of sustained action to resolve.