Spain’s booming tourism sector isn’t just crowding the beaches—it’s also squeezing the housing market, says the Banco de España.
In a recent intervention, Ángel Gavilán, the Bank’s Director General for Economics, highlighted how the rapid growth of tourism is creating “negative externalities”, chief among them being reduced access to housing for certain groups in some regions of the country.
A sector flying high, with its baggage
Speaking at the “First Meeting between Producers and Users of Tourism Statistics” hosted by the Spanish National Statistics Institute and CSIC, Gavilán laid out some sobering numbers. In 2023, more than 25% of total home purchases in the Balearic Islands were made by non-resident foreign nationals. This wasn’t just an isolated island affair—similar trends were seen across the Mediterranean coast. In the Valencian Community and the Canary Islands, foreign buyers accounted for nearly 20% of transactions; over 15% in Murcia and 10% in Andalusia. Nationally, those figures levelled out at around 8%.
One-off investors with a taste for sun, sea, and state-backed property rights are helping buoy local markets… and possibly pricing out locals in the process.
Holiday lets over housing
Add to that the rise of holiday rentals, and the situation becomes even more complex. In certain tourist hotspots, short-term rentals are gobbling up a significant portion of the housing stock. Take Marbella, for example: over 60% of all available rental properties were used for tourist accommodation in 2023. In the outskirts of Elche, that figure edged close to 70%. And in Málaga’s suburban zones, more than half the available rentals were for short-term vacationers.
When Airbnbs surge, long-term rentals can vanish—and affordable housing along with them.
The tourism paradox
Spain’s economy is heavily reliant on tourism. Between 2016 and 2019, the sector contributed an average of 12.1% to GDP and 12.3% to total employment. After a pandemic-induced dip, it recovered to similar levels in 2023. But this success story comes with a few footnotes.
Beyond housing worries, Gavilán points to congestion in urban spaces and pressure on natural resources as further downsides of unchecked tourism growth. And while Spain still tops the global ranking—second only to France by international arrivals—it’s clear that the rapid expansion of the sector is starting to crack the surface.
Zooming out, the Bank of Spain raises some long-term concerns. The sector suffers from persistently low labour productivity, limited investment, and underwhelming innovation, especially when compared to other industries. On the human capital front, the sector relies heavily on young, foreign, and low-skilled workers—hardly a beacon of economic resilience.
What’s being done?
Not all is doom and gloom. Gavilán acknowledged positive trends as well. Spain is gradually managing to spread out tourism beyond the traditional summer peak and classic destinations, reducing seasonal and geographic saturation. The quality of hotel offerings has also improved considerably. And let’s not forget that tourism is a cash cow for the external sector: increased tourist spending is helping maintain Spain’s current account surplus.
Still, the underlying message from the Banco de España is clear: if tourism continues to grow unfettered, it must do so in a way that’s sustainable, socially responsible, and mindful of the housing needs of local populations.
