The Bank of Spain estimates that 600,000 new homes are missing but that there are only 400,000 empty in areas with demand

The Bank of Spain has quantified one of the housing access problems in the country: the shortage of supply in the face of increasing demand. According to its estimates, if the imbalance between the net creation of homes and the decline in the construction of new homes continues, Spain will have a deficit of 600,000 new homes on the market by 2025. This situation, which has worsened in recent years, is described as “unprecedented”.

After the real estate crisis of 2008, the number of new homes completed has significantly decreased. From a peak of 650,000 annually between 2006 and 2008, it dropped to a minimum of 45,000 in 2016. Since then, the number of completed homes has slowly recovered, but it currently stands at around 90,000 units per year, still well below the number of new homes created annually. This gap is expected to persist in the coming years.

The Bank of Spain projects a differential of 365,000 units between the net creation of households and the production of new housing in 2022 and 2023. This deficit is expected to increase by another 225,000 homes in 2024 and 2025. The impact of this shortage is particularly intense in regions with significant population growth and tourist activity.

Several factors contribute to this lack of supply, including a scarcity of available land and labor for construction, rising production costs, and difficulties in acquiring and developing new urban land suitable for building. The rehabilitation of properties and adding empty homes to the market can only partially address the shortfall.

While there are approximately 4 million empty homes throughout the country, only 400,000 of them are located in areas with higher demand. Therefore, relying solely on mobilizing these properties would not be sufficient to cover the estimated deficit. Additionally, many of these empty homes are in poor condition or lack accessibility and energy efficiency, requiring extensive rehabilitation.

Furthermore, there are approximately 450,000 unsold properties among the 4 million empty homes, representing 2.3% of the main housing stock. Despite an increase in demand, these properties have remained unsold since 2018, likely due to their inadequate alignment with current household preferences.

The Bank of Spain acknowledges the role of individual homeowners in mobilizing new supply in the rental market. Small owners have contributed around 100,000 additional homes to the rental segment annually between 2012 and 2022, driven in part by the high profitability of rental housing investments. However, for them to continue this contribution, legal certainty is needed. The bank also suggests facilitating and promoting the participation of legal entities, such as funds, SOCIMIs, and large investors, in the Spanish real estate market.