According to a recent report by CaixaBank Research, a think tank dedicated to economic research and analysis, the housing shortage that has accumulated in Spain in recent years could be behind almost 40% of rising prices.
It is concluded that, without the added pressure of the housing shortage, the price increase in the Spanish real estate market would have been 3.7% per year, and not the 6% that actually occurred.
The report also emphasizes the need to revive housing development to mitigate rising housing prices.
The report estimates the accumulated housing deficit over the last 4 years at around 515,000 units, a figure that would increase to 600,000 homes if we take into account the completed homes and not just the issued permits, and up to 765,000 if we also add buildings that were initially intended for other alternative uses.
The housing shortage is concentrated mainly in provinces with the greatest demographic pressure and tourism demand, such as Madrid, the Mediterranean coast (especially Barcelona, Valencia, and Alicante), and the Costa del Sol (Málaga). In contrast, in the depopulated region of Spain, the deficit is much smaller.
The study conducted by CaixaBank Research also highlights that, during the first half of 2025, the Spanish real estate market has shown signs of recovery thanks to factors such as improved financing conditions and population growth:
- The revitalization of demand has been consolidated with 700,000 purchase and sale transactions in the last 12 months (until June 2025), 19.7% more than the first half of the previous year.
- In terms of supply, the construction sector is also showing signs of recovery, with just over 130,000 new homes registered in the last 12 months up to May, an increase of 13%.
On the other hand, foreign demand has gained ground, as in the last year, up to the first quarter of 2025, 18% of all home sales in Spain were final buyers from abroad. This equates to just over 130,000 transactions. Fifty-five percent of these purchases correspond to foreign residents, and the remainder to non-residents (the latter tend to have greater purchasing power, which undoubtedly affects the rising market prices in certain areas).
Finally, it’s worth mentioning that most foreign demand is highly concentrated on the Mediterranean coast, the Balearic Islands, and the Canary Islands.
