Land shortage and rising costs are key factors in Spain's housing crisis

A new report from BBVA Research highlights the shortage of final land, legislative changes, under public budget, increase in construction costs and lack of manpower as the main factors behind the limited housing supply in Spain. Without corrective measures, the situation could worsen, making access to housing even more expensive.

A detailed analysis by BBVA Research

BBVA Research has published a comprehensive report revealing the causes of the housing shortage in Spain. Since 2021, the number of people needing a new home has far exceeded the number of housing starts, with a ratio between these two variables below 0,5 in 2023, similar to the levels of the 2011-2013 economic crisis. Between 2008 and 2022, XNUMX new homes were started. 1,53 million homes in Spain, far below the 2,40 million new households created in that same period.

The report highlights that the Availability of final land, that is, land ready to begin development, is one of the most critical challenges. Although there is land available in Spanish cities, the proportion of land ready for development is limited. BBVA Research suggests that a review and update of urban planning, many of them dating from before 2008, would allow for better use of available land and a more agile response to current housing needs.

Impact of legislative changes and the public budget

The frequent legislative changes have also affected the housing supply. Although some measures have generated uncertainty among developers and rental companies, others have opened up new opportunities to adapt and improve development plans. However, the Public budget allocated to housing remains relatively low. Since 2021, only about 13.000 protected housing units have been started per year, compared to 70.000 per year from 1995 to 2010. BBVA Research considers it necessary increase public spending in this area to increase the social housing stock to 20%, which would help balance the real estate market.

La expansion of foreign tourism and regulatory instability have also contributed to the rise in tourist rental properties. The perception of insecurity among property owners following the approval of new regulations has led many to opt to rent their properties to tourists rather than on a long-term basis.

Rising construction costs and lack of labor

Another key factor is the rising costs of building materials, which has seen a significant increase in recent years. The energy crisis has been a catalyst for innovation and optimization in the use of resources in the construction sector, which is highly dependent on energy. This increase in costs has directly impacted the final price of the houses, making access to affordable housing even more difficult.

Furthermore, the lack of skilled labor in the construction sector represents a major challenge. This, however, can also be seen as an opportunity for investing in training and capacity building, improving skills and attracting new talent to the sector. The adoption of advanced technologies can increase productivity, helping to mitigate the shortage of new housing.

Solutions and future prospects

The BBVA Research report highlights the need to adopt measures that help reverse the factors that limit the supply of housing. Possible solutions include a Increase in credit for promotion, something that is already being addressed with initiatives such as the ICO-Housing line. However, it is crucial to develop a regulatory framework that allows this push without taking excessive risks.

The implementation of public policies that promote the review of urban planning, increasing the budget allocated to housing and improving the training of the workforce are essential steps to boost residential construction and the supply of rentals at affordable prices. Collaboration between the public and private sector will be essential to address these challenges and ensure equal access to housing in Spain.

In short, housing shortage in Spain is a complex problem with multiple causes. Addressing this challenge will require a combination of regulatory measures, public and private investment, and an innovative approach to construction and urban development. Only in this way can we move towards a more balanced and sustainable real estate market that meets the needs of all citizens.