Spain’s housing shortage is now officially bigger than previously thought, with the Bank of Spain revising its estimate of the deficit up to 700,000 homes.
From 600,000 to 700,000 missing homes
Back in spring 2024, when Pablo Hernández de Cos was still governor, the Bank put the housing shortfall at around 600,000 units. His successor, José Luis Escrivá, has now added another 100,000 to the tally, presenting the revised figure at a recent event hosted by the General Council of Economists.
The Bank’s own calculations suggest that Spain accumulated a deficit of more than 400,000 homes in 2022–2024, and that another 100,000 could be added in 2025 alone. In total, the housing market has fallen short by around 700,000 homes over the past decade – a figure broadly in line with estimates published by Idealista earlier this year.
Where the shortage bites hardest
Half of this shortfall is concentrated in Spain’s most dynamic markets – Madrid, Barcelona, Valencia, Alicante, and Málaga – which goes a long way to explaining why prices there have surged so aggressively. According to the Bank, in real terms current prices are back at levels last seen in 2004.
Data from the Ministry of Housing underline the pressure: the average price of free-market housing jumped 10.4% year-on-year in Q2 2025 to €2,093/m², the third-highest figure this century. Even protected housing is at record valuation levels, edging close to €1,200/m².
Demand keeps growing, supply stays rigid
The Bank of Spain highlights the drivers of demand: rising population through immigration, shrinking household size, urban concentration, and continued foreign appetite for Spanish homes. All of this is happening against a backdrop of what it calls “a relatively rigid housing supply.”
Constraints on new construction include a lack of developable land, shortages of skilled labour, regulatory uncertainty, rising short-term rental activity, and weak investment incentives.
A bottleneck for the economy
The central bank warns that the shortage of housing could become a “bottleneck” for Spain’s wider economy – a concern echoed by CaixaBank and even the European Central Bank.
CaixaBank’s CEO Gonzalo Gortázar recently warned that if supply is not expanded, access to housing will worsen as fewer households can afford to buy or rent. He called for broad political agreements, less bureaucracy, and more land for development. ECB vice-president Luis de Guindos has also described housing as a bottleneck undermining Spain’s growth prospects.
No quick fixes
For now, the Bank of Spain sees little chance of the imbalance between supply and demand easing in the short term. Without decisive policy measures and a more stable regulatory framework, the housing crisis risks escalating into what it calls a “first-order social problem.”
