According to Open4Business, the housing crisis in Spain continues to worsen against a backdrop of a long-standing shortage of new-build homes, a rise in the number of households and a record increase in the population, a significant proportion of which is attributable to migration. The structural housing shortage in the country is estimated at approximately 700,000–750,000 properties, according to data from the Funcas research centre.
The current situation should not be compared with the housing bubble of the 2000s. Back then, significantly more housing was being built in Spain, and market growth was fuelled by lending. Now the problem is the opposite: supply is consistently lagging behind demand.
In recent years, around 100,000 new homes have been completed annually in Spain, whilst some 230,000 new households have been formed. The gap that has accumulated since 2020 has reached nearly 700,000 properties.
As a result, both house prices and rental rates are rising. The problem is particularly acute in Madrid, Barcelona, the Balearic Islands, Valencia and popular coastal areas. At the same time, the shortage is gradually spreading from the largest cities to their suburbs and medium-sized towns. Funcas notes that rents have been rising faster than wages in recent years, and that young tenants spend on average around 35 per cent of their budget on housing and utilities.
Experts believe that some of the measures being taken by the authorities can only temporarily cap prices, but will not address the root cause of the crisis. Rent controls may reduce housing costs for some current tenants, but at the same time reduce the number of flats that landlords are willing to put on the market. Subsidies for buyers, given limited supply, may also lead to further price rises.
Among the long-term solutions, Funcas cites increasing the supply of land, speeding up the granting of planning permission, improving legal certainty for developers and property owners, and expanding the stock of affordable rental accommodation. Social rental housing accounts for only around 2–3 per cent of the housing stock in Spain, which is significantly below the EU average.
Spain’s rapidly growing population is placing further pressure on the market. As of 1 July 2026, the country’s population stood at a record 49.80 million, which is 444,200 more than a year earlier. At the same time, the Spanish National Institute of Statistics (INE) explicitly states that the increase in population is driven by people born abroad, whilst the number of residents born in Spain is falling.
The number of people living in Spain who were born abroad reached 10.29 million by the middle of the year, accounting for more than a fifth of the country’s population. The number of residents with foreign citizenship stood at 7.44 million, having increased by 87,200 in the second quarter alone.
According to the latest comprehensive breakdown from the INE, the largest foreign communities are Moroccan nationals – around 969,000,
Colombia – 677,000, Romania – 609,000, Venezuela – 378,000, Italy – 346,000 and the United Kingdom – 266,000. There are also significant communities of people from Peru, China, Ukraine and Latin American countries.
The influx continues into 2026. In the second quarter alone, around 34,000 Colombian nationals, 23,300 Venezuelans and 21,100 Moroccans arrived in Spain. In the first quarter, Ukrainians were once again one of the largest groups of new arrivals, numbering around 25,700 people.
Separate statistics from the Spanish Ministry of Migration show that, by the end of June 2026, 353,000 Ukrainian citizens already held valid residence permits, mainly thanks to the temporary protection scheme.
The growth in the foreign population cannot be considered the sole cause of the housing crisis; experts attribute it primarily to a decade of insufficient housing construction. However, migration significantly increases the number of households and the demand for rental accommodation, particularly in major cities and economically active coastal regions. Assuming the construction of around 100,000 properties per year, the additional population growth of hundreds of thousands of people becomes a significant factor in the further rise in house prices.
Thus, the housing crisis in Spain is driven by several factors at once: a chronic shortage of new-build housing, growth in the number of households, a limited supply of affordable rental accommodation, internal migration to major cities, foreign buyers and the tourism sector. The rapid population increase driven by immigration exacerbates the existing shortage, but is not its root cause.