The Bank of Spain has identified a significant gap in housing supply, estimating a need for 750,000 new homes to meet current demand. Its 2025 annual report indicates this shortfall is unevenly distributed across provinces, with some areas facing more acute challenges than others. The report states that residential supply has not kept pace with rising demand, a trend that experts say is worsening in key regions.
Madrid, for instance, has just 9.9% of its housing stock available for residential use, far below the national average of 27.1%. Barcelona, Alicante, Valencia, Murcia, and Málaga follow closely behind the capital. Meanwhile, Ávila stands out with 58.2% of its properties potentially available for sale or rent. This disparity raises questions about how regional policies and market conditions influence housing availability.
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Part of the problem stems from properties held for other purposes. Around 400,000 homes are used for tourist rentals or as second homes, limiting their availability for long-term residents. Non-resident buyers accounted for 7.4% of home purchases between 2021 and 2025, with 50,000 units sold annually on average. This trend is particularly pronounced in coastal provinces, where demand from foreign investors is high.
Another paradox exists: nearly 450,000 homes built during the 2000s property boom remain vacant. Some sit in unsuitable locations or require extensive repairs. The report notes that these units are not being repurposed quickly enough to address current needs. This underutilization adds to the complexity of solving the housing crisis.
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Spain and Portugal are highlighted as countries where housing construction has lagged behind household growth. Spain’s cumulative shortfall is 6.6%, compared to Portugal’s 3.7%. Yet Portugal’s deficit of 300,000 homes is still significant, though smaller than Spain’s. Italy faces a 400,000-unit gap, while France remains roughly balanced. Germany, the only major eurozone economy improving, reduced its housing deficit by 0.5%.
Regulatory challenges are a major barrier. Bureaucratic hurdles and overlapping rules between local, regional, and national governments slow development. Urban planning processes are described as “slow-moving,” while a shortage of skilled labor and declining productivity further stall progress. These factors create a bottleneck that experts say is difficult to overcome without policy changes.
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In six major urban areas, where 36% of households live, 1.1 million homes could be built but are not yet started. However, only 320,000 of these are currently planned. The gap between potential and actual construction shows the scale of the challenge. Local governments are urged to streamline approvals and address labor shortages to accelerate progress.
The housing crisis is not just a numbers game—it reflects deeper issues in land use, regulation, and economic priorities. While the report outlines the scope of the problem, it stops short of proposing solutions, leaving policymakers to grapple with the implications. For now, the focus remains on closing the gap before it grows further.