The Banco de España is warning of a persistent housing shortfall. The central bank estimates that the gap between the formation of new households and the number of homes completed in Spain between 2021 and 2025 amounted to around 750,000 units. If trends remain unchanged, the gap could grow by a further 300,000 or so homes by 2028, taking it above one million. Deputy Governor Soledad Núñez reiterated this assessment this week, referring to the latest 2025 Annual Report.
The central bank’s diagnosis is that new construction has for years failed to keep pace with household formation driven by demographic change. The situation is particularly strained in major urban centres and coastal regions with high demand. Access to housing is especially difficult for low-income households, young adults and people of foreign origin.
Long-term data paint an even more stark picture. In real terms, after adjusting for inflation, household disposable incomes in Spain have risen 1.8-fold since 1980. Real residential property prices, however, rose 3.5-fold over the same period. Housing affordability has therefore deteriorated much more sharply than the average across the eurozone. The indicator used by the central bank compares changes in residential property prices with disposable income per capita and shows a growing burden for buyers.
The pace varies considerably by region: provinces such as Málaga, Madrid and Balearic Islands have seen the sharpest real price rises since 2014. At the same time, construction activity in many municipalities remains below demand, entrenching the shortage of supply.
Banco de España recommends a package of measures combining short-term relief with structural reforms. These include faster planning approvals, expanding new housing construction—particularly in well-connected locations—making more efficient use of public housing stock, and targeted demand-side interventions that avoid unwanted effects on supply. Regional differences should also be taken into account to prevent perverse incentives.
The central bank stresses that forecasts always depend on assumptions about the economy, interest rates, migration and policy. The immediate trigger for the warning is Soledad Núñez’s latest assessment; the underlying evidence comes from the 2025 Annual Report. Policy decisions, for example on speeding up planning procedures or setting a framework for tourist rentals, could change these trajectories in either direction.
Editor: Mira Cadena (Article created with AI assistance).