Spain faces a significant imbalance between housing supply and demand, especially in major cities and coastal areas. Factors such as limited developable land and strict urban planning regulations have slowed the construction of new homes. Meanwhile, demand remains high due to economic recovery and urban population growth, driving a sustained increase in property prices.
What are the primary hurdles to accessing housing in Spain?
Let’s uncover them together with our fixer in Spain team.
Most affected Autonomous Communities
- Balearic Islands: The Balearic Islands have one of the most critical housing situations. With the highest property prices in Spain, rental costs can consume up to 25% of the average income. Additionally, the effort required to purchase a home has increased by 17.2% in recent years, reflecting growing pressure on the local housing market
- Madrid: The Community of Madrid suffers from high demand and limited supply, leading to significant increases in both rental and purchase prices. Residents spend around 18.5% of their average income on rent, and buying a home requires approximately 8.3 years of salary. This tense situation has made Madrid one of the most affected areas in the housing crisis.
- Catalonia: In Catalonia, especially in Barcelona, the situation is similarly dire. Rental prices account for 21% of the average income, and continuous demand alongside limited supply has kept prices on the rise. Catalonia is one of the main regions identified as “stressed areas” under the new Housing Law, aimed at containing prices and increasing affordable housing supply (La Vanguardia).
The economic context
- Employment and Wages: Spain’s economic recovery has been uneven, with high unemployment rates, especially among young people. As of 2023, the national unemployment rate was around 13.2%, with youth unemployment exceeding 30%. These figures highlight the economic insecurity that complicates housing affordability (Bankinter).
- Interest Rates and Mortgages: Low interest rates have somewhat mitigated the cost of home ownership. Fixed-rate mortgages average around 1.7%, while variable rates are at 1.5%. This translates to an average mortgage payment of €445 for fixed rates and €409 for variable rates per month. However, stricter lending criteria mean that many potential buyers still struggle to secure financing.
- Regional Disparities: There are stark regional disparities in income and housing costs. The average annual income in Spain is €30,690, but it ranges from €37,728 in Navarre to €22,250 in Extremadura (El Español). In high-demand areas like Madrid and Barcelona, housing costs far outstrip these income levels, further exacerbating affordability issues.
An unresolved issue
Access to housing in Spain remains a critical issue, particularly in major cities and tourist regions. The imbalance between supply and demand, coupled with rising prices, makes both buying and renting a significant financial burden. Spanish families must allocate a substantial portion of their income to housing, underscoring the urgent need for public policies that promote the construction of affordable homes and regulate rental prices. Implementing these measures is essential to ensure that more people can secure decent housing without compromising their financial stability