The Spanish housing crisis is now one of Europe’s biggest political stories. Thousands are protesting over rising rents and evictions, thousands of young adults are struggling to leave their parents’ homes, and Spain’s central bank estimates that the country already has a housing shortage of around 750,000 homes.
Spain was at the centre of one of Europe’s biggest property booms before the 2008 financial crisis; where it built huge numbers of homes, experienced a property crash and was subsequently left with large numbers of empty properties – very much like Ireland.
What Is the Spanish Housing Crisis?
Much like Ireland’s, Spain’s problem is partly one of supply and demand. Demand for housing has recovered strongly, especially in major cities, coastal areas and areas with employment opportunities.
Housing construction, on the other hand, has not kept pace.
The European Commission’s 2026 assessment of Spain describes a “severe mismatch between supply and demand“, especially in major urban and metropolitan centres, islands and coastal areas.
Spain’s central bank has estimated that the accumulated shortage stands at around 750,000 homes, with projections suggesting it could approach 1 million by 2028 if the gap continues growing.
And get this – according to the National Institute of Statics, the INE, Spain has around 3.4 million homes/properties classified as ’empty or unoccupied’.
Well, you could be asking: Why not simply use the empty homes?
Spain does have empty Homes, but many are in the wrong places
Many homes are located in rural areas with relatively weak population growth, others need significant renovation or have poor energy efficiency and/or ease of access.
Meanwhile, housing demand is mostly concentrated around places such as Madrid, Barcelona, commuter towns, coastal cities and other employment and tourism centres. This is the reason why Spain can have empty houses and a housing shortage at the exact same time.
- If a town has 1,000 empty houses but only 50 jobs, those houses will not solve a shortage that’s affecting workers all the way in Madrid.
What Happened After Spain’s 2008 Property Crash?
During the years before the global financial crisis, enormous amounts of housing were built, and construction and property development became major parts of the Spanish economy. Sounds familiar, doesn’t it?
Then when the property bubble burst, like it did in most 1st world nations, developers collapsed badly and banks suffered huge losses. Construction activity obviously also fell dramatically as a result.
- This experience left banks (lenders) and developers (borrowers) a lot more cautious about returning to the levels of construction seen before the crash.
- However, Spain’s economy and population eventually began growing again, and so did housing demand.
Construction did grow too over the years, albeit much more slowly.
According to Colliers, Spain issued permits for more than 127,500 homes in 2024; the highest number since 2008.
While that may have sounded encouraging as a headline, it’s easy to ignore that that level of construction still remained relatively low compared with housing needs at the time. All that meant was that Spain had moved from one imbalance to another, a cylce perfectly illustrated below:
Why Can’t Spain ‘Just Build’ More Homes?
Building more housing sounds like an obvious solution. However, with the amount of time I’ve spent researching housing in Ireland, I’ve come to realise that coordinating these things can be very complicated in practice.
Just like with Ireland, Spain also faces:
- lengthy administrative and planning delays,
- shortages of skilled construction workers and
- problems getting enough suitable land ready for development.
- its construction industry is also highly fragmented, with many small and micro-sized businesses dotted around the country.
Meanwhile, the European Commission argues that making more land available, simplifying permitting and reducing administrative bottlenecks could help increase supply. It’s easy to state the obvious, but implementation is another beast altogether.
But let’s nto also forget – Money and demand do not automatically create houses.
- Workers, infrastructure, land, planning approvals, finance and construction businesses all have to come together before a single home can actually be delivered. Then what about hundreds of thousands??
This is something Ireland is also dealiong with right now, as it attempts to increase housing construction – while also delivering major infrastructure projectssuch as the MetroLink construction project. So yeah, different construction programmes can ultimately compete for many of the same workers and contractors.
What About Spain’s Social Housing Situation?
Another important part of the Spanish housing crisis is the relatively small amount of social and affordable housing available.
Some sources estimate that social housing represents only around 1.5% to 1.7% of Spain’s housing stock, compared with an EU average of roughly 6% to 7%. This is important because households that have been priced out of private housing usually have fewer alternatives.
Spain has begun trying to change this, as the government established the CASA47 State housing agency and adopted a €7 billion State Housing Plan for 2026–2030, aimed at expanding social and affordable housing and to also support the renovation of existing homes.
However, building a substantial public housing stock takes years. So Spain therefore, has to deal with today’s affordability problems while also simultaneously trying to increase tomorrow’s housing supply.
Are Holiday Rentals Part of the Problem?
Tourism is another important part of the debate in SPain.
In 2024, it was estimated that around 320,000 homes held licenses as holiday rentals, equivalent to about 10% of the rental market.
But then again, the effect is highly concentrated geographically.
- A holiday home in an area with little residential demand may have almost no impact on the housing affordability in that local area.
- Thousands of tourist properties that are concentrated in a city or coastal area – where local residents are already struggling to find rental homes – can have a much greater effect.
So it might be misleading to say that holiday rentals caused Spain’s housing crisis. But in high-demand locations, moving much-needed homes from residential use into short-term tourist accommodation can make an existing shortage more difficult.
What About Institutional Investors?
Large property investors are also an important focus of Spain’s housing debate.
However, this part of the debate also requires context.
According to recent reporting based on Bank of Spain and land registry data, companies own around 4.4% of Spanish homes, while approximately 40% of rental properties are owned by individual landlords with just one rental property. I’ll be honest, I’m surprised by these statistics as I expected private equity to have a lot more.
Granted, institutional ownership can be much more concentrated in particular cities and neighbourhoods. The prices in those regions can tell you all you need to know.
- This also means that large investors can have significant local influence without owning anything close to the majority of Spanish housing.
This has also created a difficult policy question in Spain.
On one hand, institutional investment can provide capital for the construction of new housing. On the other, concentrated ownership of existing homes raises significant concerns about rents, tenant security and the financialisation of housing.
Striking a balance between those two concerns is now the issue.
Why Are Young People Particularly Affected?
Around 73% of Spanish people own their homes.
However, more than half of Spanish aged 18–34 either live with their parents or depend on them for living costs.
Very much like Ireland, house prices have been rising much faster than wages, and pushing even more people towards a rental market that is already under intense pressure.
- This has created a type of distinction between people who already own a home vs people trying to own one.
A rising property market can increase the wealth of existing homeowners while simultaneously making it harder for younger households to buy their first home.
Is There 1 Obvious Solution to the Spanish Housing Crisis?
Probably not.
- Spain needs more housing in the places where demand is strongest.
- It also needs more social and affordable housing.
Now, making better use of suitable vacant properties could help. But you could also say the same for faster planning and permitting, greater construction capacity and additional residential development.
At this time, Spain is also debating on stronger tenant protections, rent controls, restrictions on certain property investors and tighter regulation of short-term rentals.
- Supporters argue that tenants need protection now rather than waiting years for additional homes to be built.
- While critics argue that excessive regulation could discourage landlords and investors, which could reduce housing supply further. In fact, this is true for Ireland.
So this leaves Spain facing two problems at the same time:
How do you protect people struggling in today’s housing market; while building enough homes to make tomorrow’s market work better?
From Housing Crisis to National Protest
For years, Spain’s housing problems had been becoming increasingly serious without one single event defining the crisis.
That all changed in September 2026.
The eviction of 87-year-old Maricarmen Abascal, who had lived in her Madrid apartment for more than 70 years, triggered demonstrations across Spain and transformed an individual housing dispute into a national political issue.
Her case brought together many of the issues discussed above: rising rents, security for long-term tenants, property investment, generational concerns and the question of what governments should do when people cannot obtain secure and affordable housing.
It would eventually lead to something even more remarkable: Maricarmen returning to her home while Spain’s housing crisis moved to the centre of national politics.
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