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Madrid, we have a problem

Are you up for something different? This week, as Prime Minister Pedro Sánchez is being raked over the coals (at least in the media), for engaging in supposed housing vaporware — announcing tons of new housing but not actually, um, building it — I thought it might be useful (and interesting!) to step back and ask the big questions: How many homes does Spain really need? Where? And how confident should we be in any of the answers?

The numbers, such as they are, paint a stark picture. Since 2021, Spain has formed 1.2m new households — a mix of people striking out on their own, starting families, or arriving from abroad. Over that same period, only 474,000 new homes were completed. Do the math, and you get a deficit somewhere north of 730,000 homes, depending on who you ask. CaixaBank Research puts it at 734,000. The Bank of Spain says 750,000. OBS Business School lands at 740,000. The differences are marginal.

As for the scale of what’s needed, choose your own nightmare. CaixaBank Research calculates that Spain would need to produce around 330,000 homes annually over the next five years to absorb the existing deficit — roughly quadrupling the current completion rate. (Spain completed 102,000 in 2024, its best year in over a decade. ) Or look at it this way: Spain currently starts just 2.7 new homes for every 1,000 residents. Before the 2008 financial crisis, that number was nearly 20 per 1,000. The gap between where Spain is and where it needs to be is a canyon.

Let us count the ways: