How Spain went from building more homes than it needed to facing a severe housing crisis

Image source, Francesco Militello Mirto/NurPhoto via Getty Images Image caption, The temporary eviction of Maricarmen Abascal has reignited the debate over the housing crisis facing Spain. Byline, Author's title, BBC News Mundo Publication date 9 minutes ago Reading time: 8 min Over the past few days, the name of Maricarmen Abascal, an 87-year-old retiree, has been on the lips of many Spaniards. The images of the elderly woman being carried out on a stretcher by paramedics from the apartment in central Madrid where she had lived as a tenant for seven decades have shocked the country. Although she will finally be able to return to her home after reaching an agreement with the company that owns the building, the impact her case has caused shows no signs of stopping. In addition to sparking a wave of protests, it has once again placed at the center of public debate one of the problems that, according to surveys, has worried Spaniards the most for years: access to affordable housing. In 2024, one in four Spanish families said they had problems accessing or keeping their home, according to a report published by the Foundation for the Promotion of Social Studies and Applied Sociology (FOESSA). Buying a home or, failing that, renting one has become an increasingly difficult goal for thousands of people in Spain. 47.3% of Spanish young people aged 26 to 34 who still live with their parents say the main reason is that they cannot afford to buy or rent a home due to high prices, the National Statistics Institute (INE) reported last April. But how is it possible that a country that between 1997 and 2008 built five million houses and apartments — around double what the market demanded at the time — today has hundreds of thousands of people struggling to access housing? Skip Most read and continue reading Most read End of Most read Image source, Alberto Ortega/Europa Press via Getty Images Image caption, The 2008 crisis hit the Spanish construction sector hard, wiping out many companies and leaving many projects unfinished. The crisis that changed everything "The shift occurred precisely because the construction excess recorded between 1997 and 2007 left the impression that too much had been built," says Carme Trilla, president of Habitat3, a non-profit foundation that acts as a manager of social housing and residential inclusion for vulnerable groups. This view is also shared in academia. "Until 2008 we were doing exactly the opposite of what we do now," argues Jorge Galindo, director of Economic Policy at Spain's Esade business school. "At that time we were building practically two homes for every household that was created and, at the same time, we had a river of cheap credit financing both the construction and the buying and selling of these homes without any rational criteria," Galindo explains. However, the financial crisis that originated in the United States after the collapse of Lehman Brothers burst the Spanish real estate bubble, as the credit tap was shut off and housing prices collapsed, radically transforming the sector. "We went from building almost 14 homes per 1,000 inhabitants, which was an aberration, to two per 1,000, which is another aberration, while in the rest of the countries four homes are built per 1,000 inhabitants," notes José García Montalvo, professor of Economics at Pompeu Fabra University. The result is that today the country has a housing deficit of around 750,000 homes, according to Bank of Spain data. However, just a few days ago the regulator warned that this figure could exceed one million in the next two years if no measures are taken. The solution seems to be in plain sight: building far more than the 90,000 homes currently built each year in Spain. But why isn't that happening? "Because the sector was decimated," notes García Montalvo. Paloma Taltavull de la Paz, professor of Economics at the University of Alicante, speaks in similar terms, indicating that the crisis had "tremendous consequences" for the construction sector in Spain. "The sector shrank so much that there are few construction companies today," she tells BBC Mundo, while asserting that a possible recovery will take time. Image source, Andrey Rudakov/Bloomberg via Getty Images Image caption, Construction fell while the population grew, driving up prices for both homes to buy and to rent. The law of the market comes into play But while housing construction does not recover, another factor complicating the picture is population growth, driven mainly by immigration. "Since 2021, household creation has been on the rise. Right now, a quarter of a million net households are being created in Spain every year, most of them thanks to migration from Colombia and Venezuela," Galindo explains to BBC Mundo. "If in the bubble era we built twice as many homes as the households being created, today we build a third in relation to the households being created. And so the people who are coming to live in our country, to contribute to our economy, to be part of our society, cannot find a place to live," he points out. The combination of insufficient supply and growing demand explains the rise in prices of available homes, especially those intended for rent. "The first entry door for a person arriving in a new city, whether from within or outside Spain, as well as for someone moving out on their own, is renting. That greater demand pressure, combined with the lack of sufficient supply, explains the sharp escalation in prices," adds the expert. Since 2015, the prices of houses and apartments for sale or rent have risen 80%, while workers' wages have only increased 30% in the same period, according to INE data. In some Spanish cities, the average rent currently reaches US$1,335 per month, a figure equivalent to 98.7% of the average salary of a young person. Image source, Olmo Blanco/Getty Images Image caption, The eviction of the 87-year-old retiree has sparked a wave of citizen protests across the country. The role of the "vultures" and tourists The temporary eviction of Maricarmen, the result of a judicial procedure initiated by the company that owns her home, has also put the spotlight back on other actors in the market, such as investment funds and those who dedicate properties to tourist rentals. "They have an important responsibility, although they are not the only ones," Jaime Jover, spokesperson for the Tenants' Union of Seville, admits to BBC Mundo. "Investment funds are a new actor that has entered the Spanish market forcefully, largely promoted by the government, because they have different tax breaks. Their way of operating heats up the market a lot, through large purchases of homes that they resell at higher prices in three or four years, without making any improvement investment," he adds. However, García Montalvo doubts their impact. "Investment funds, the vulture funds as they are called here, have a tiny proportion of the market, around 5%. So what is their role in the market? None," the economist asserts. "In Spain there are no large holders; most homes are owned by small landlords who have one or two for rent," he adds. Around 2.4 million Spaniards own rented houses and apartments, according to data from the Rental Observatory. In recent years, many of those owners have opted to rent those homes to tourists or to people whose stays will be short, which has reduced the number of units available for families, the consulted experts point out. In 2025, Spain received 96.8 million international visitors, representing a 3.2% increase over the previous year. These figures make the European country the second most visited in the world after France, according to the World Tourism Organization (UN Tourism). "The supply deficit is not only due to fewer homes being built, but also to the fact that part of the housing stock is not destined for regular residence, but for tourist or seasonal rentals. In certain areas, this exerts additional pressure on the market," adds Trilla. Image source, OSCAR DEL POZO/AFP via Getty Images Image caption, The owners of some homes prefer to rent them to the tourists who visit the country every year. What the figures hide The lack of supply seems to be, according to the experts, the fundamental cause of the housing crisis Spain is going through. However, this raises a question. What about the 3.8 million homes that, according to the INE, are empty in the country? "They are in areas where nobody wants to live," Galindo replies. "Most of those homes are located in municipalities that people have left and that are unlikely to be occupied again, because the jobs, the opportunities and the families are no longer there," he adds. The case of Maricarmen has also served to focus attention on the issue of evictions, for non-payment of rent or mortgage. Spanish media report that 45 evictions per day occurred during the first quarter of 2026. However, since 2021, when 39,096 cases were recorded, this type of situation has steadily decreased, standing at 24,520 in 2025, according to data from the General Council of the Judiciary. The body also specifies that not all of these evictions necessarily affected occupants of homes, because they also cover commercial premises, parking spaces, etc. Although at first glance this seems like good news, some experts say this statistic hides another side of the crisis. "It's a strange thing: it seems things are getting better, but they're actually getting worse," says García Montalvo. "Who gets a rental home? Only the first one? And who is the first? The digital nomad earning 6,000 euros ($6,800) from a German or Swiss company. Who are the last ones? Immigrants, young people and single-parent families, who never manage to rent," he explains. "So what happens? Tenants are getting richer and richer, so the statistic improves because the digital nomad doesn't have to be evicted," he adds. In his view, this phenomenon also explains why more and more homes in large Spanish cities are rented by the room instead of being leased whole. "The market is under so much pressure that homes are no longer rented whole, but in bits," he says. Faced with the wave of indignation and protests triggered by Maricarmen's case, Pedro Sánchez's socialist government has announced a series of measures, including the suspension of certain evictions until 2030 and the extension of some rental contracts, among others. However, these measures still have to be ratified by Congress. Image source, Burak Akbulut/Anadolu Agency via Getty Images Image caption, Since 2015, the price of housing, whether to buy or rent, has increased 80%, while salaries have only grown 30%, according to INE data. Download the new BBC World Service app. Choose BBC News Mundo and receive news alerts, documentaries and analysis, all in one place. Important: the new app is not available in the UK or the United States. 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