Spanish Prime Minister Pedro Sánchez inaugurated the sovereign fund "España Crece" (Spain Grows), which aims to mobilize €120 billion for public and private investments. Of this amount, approximately €23 billion will be allocated directly to building 15,000 affordable homes annually. This initiative responds to the deepening housing crisis, which has forced young Spaniards to camp outside real estate offices in search of social housing units.

Huge fund budget

The España Crece instrument aims to mobilize a total of €120 billion, equivalent to about 7% of Spain's GDP for investment purposes.

Target: 15,000 homes

The government plans to build 15,000 units annually, using €23 billion for preferential loans to developers constructing affordable housing.

Camping citizens

In Alzira, young people spent 72 hours in queues outside sales offices to obtain the right to purchase VPO homes for €120,000.

Prime Minister Pedro Sánchez officially presented a new financial instrument intended to become the foundation of the Spanish economy after the expiration of EU reconstruction funds. The "España Crece" (Spain Grows) fund has an initial capital of €10.5 billion but ultimately aims to attract capital of around €120 billion. The housing sector, one of the most sensitive points of Spanish social policy, will receive support of €23 billion. These funds are intended to finance 15,000 homes per year, which should alleviate the drastic shortage of rental and sale properties. The program will be managed by the Instituto de Crédito Oficial (ICO), which will offer developers preferential credit conditions, including debt forgiveness of up to 30%, provided investments are carried out below market prices. The Spanish real estate market has not fully recovered from the 2008 bubble burst, leading to a multi-year stagnation in social housing construction. The current housing deficit is estimated by the Bank of Spain at 700,000 units, which at the current pace proposed by the government would mean a 45-year wait to solve the problem. The scale of citizens' desperation is best illustrated by events in the town of Alzira near Valencia. Dozens of young people, such as 28-year-old Miriam Segura, have been camping since Saturday in tents in front of a real estate office to sign up for the waiting list for homes with VPO (Vivienda de Protección Oficial) status. These units, valued at around €120,000, are the only chance for independence for a generation struggling with low wages and high rents in metropolitan areas. Despite the government's optimism, the opposition parties PP and Vox criticize the plan as a "smokescreen" and a recycling of unused loans from the Next Generation EU fund, accusing the prime minister of lacking real results from earlier promises to build 200,000 homes. „This is the largest volume of public and private financing on favorable terms in the history of our democracy, aimed at solving the housing problem.” — Pedro Sánchez Annual fund targets: 15, Total deficit (Bank of Spain): 70023 billion € — will be the expenditure on housing construction

Mentioned People

  • Pedro Sánchez — Prime Minister of Spain, who announced the creation of a sovereign fund aimed at combating the housing crisis.
  • Carlos Cuerpo — Spanish Minister of Economy participating in the presentation of the new financial instrument.