The differences between political proposals are clear. The PSOE, currently in government, advocates for a greater intervention of the public sector, controls on rents, and the expansion of the social housing stock, while the Popular Party (PP), in opposition, pushes for measures aimed at increasing the housing supply and offering tax incentives.
Strong growth in housing prices, solid demand, and a supply that responds too slowly
Spain is among the eurozone countries that record the highest increases in housing prices. Year-on-year price growth has remained at double-digit rates for seven consecutive quarters, reaching 12.1% in the second quarter of 2026, with significant differences between cities and regions.
Since 2014, price increases have been particularly pronounced in areas that concentrate economic activity and population, mainly Madrid and Barcelona, as well as in regions where the demand from non-resident buyers is particularly high, including the Mediterranean coast, the Balearic Islands, and the Canary Islands. Price growth has been greater in the second-hand housing market (+12.9%, according to the National Statistics Institute, INE), which accounts for the majority of transactions, than in the new build segment (+7.4%). The increase is not limited to owned housing. Rents have also experienced significant increases, reaching an average price of 15.1 euros per square metre in September 2026, a 5.6% increase year-on-year, following an 8.5% rise in 2025.
The rise in housing prices reflects strong demand, supported by the increase in real disposable income of households, the resilience of the labour market, and the relaxation of financial conditions following interest rate cuts by the European Central Bank (ECB) between June 2024 and June 2025. This has been complemented by a rapid population growth, driven by high net migration flows. Demographic changes have favoured the formation of new households, increasing demand for both rental and owned housing. According to the Bank of Spain, 240,000 new households were created in 2025. In some regions, demand has also been boosted by non-resident buyers and the expansion of the short-term tourist rental market.
The housing supply has struggled to keep pace with demand due to various structural limitations. Notable among them are the scarcity of land ready for development, the slowness in project execution, and inefficiencies in urban planning and licensing procedures. The lack of labour in the construction sector and the rise in construction costs have further limited supply. As a result, the number of completed homes has remained low since 2014. In 2025, fewer than 100,000 homes were completed, a figure far below the rate of new household formation.
Therefore, Spain faces a significant housing supply deficit. The Bank of Spain estimates that the accumulated deficit reached 750,000 homes between 2021 and 2025 and forecasts that it could reach one million by 2028.
