Spain's housing deficit hits 750,000 units, double Italy's, as young renters face decade of wages to buy

Spain's accumulated housing deficit reached 750,000 units between 2021 and 2025, according to the Banco de España's 2025 Annual Report. The figure, which compares to 400,000 in Italy and 300,000 in Portugal, reflects an imbalance between robust household formation (240,000 in 2025 alone) and sluggish construction (92,000 completions, down 9% on 2024). Only Germany among large euro-area economies managed to build more homes than it created households over the period.

Regional concentration and supply bottlenecks

More than half (52.5%) of the shortage is concentrated in six provinces: Madrid, Barcelona, Alicante, Valencia, Murcia and Málaga. The central bank highlights that Spain does not have a single housing market but many, making supply-side responses harder. Land availability, construction productivity and labour shortages are the main constraints.

Young renters trapped

Rental tenure has risen sharply, with 54.7% of households headed by someone under 30 now renting, up 15.4 percentage points since 2007. For those aged 30–44 the rate is 37.1%. The bank estimates that only 10–15% of renting households could afford a mortgage without extreme indebtedness. Young people need almost seven years of gross salary to buy a home, rising to 7.5 for those born abroad and up to 10 in cities like Madrid, Barcelona or Málaga.

In the eighties and nineties, labour market analysis was prioritised because of the social impact of having or not having a job; now that situation applies to the housing market.

Non-resident and tourist use

Foreign buyers and tourist rentals together account for around 900,000 homes, or 3.3% of the total stock. Tourist flats alone number roughly 355,000 (1.5% of stock) but reach about 10% of the rental market in some areas, such as the historic centres of Málaga and Seville and parts of Barcelona and Madrid. The bank says these uses add pressure on prices in already tight markets.

Policy outlook and risks

The Banco de España urges coordinated supply-side measures, describing the outlook as "not very encouraging." It supports temporary, targeted limits on non-residential uses (tourist and seasonal rentals) in stressed zones but warns that demand-side controls risk hurting tourism and commerce if maintained without a significant increase in supply. Financial stability indicators do not yet show the macro-financial imbalances that preceded the 2008 crash, but the bank stresses the need to monitor the gap closely.

What we see on the supply side is not very encouraging.