Housing is suffocating the Spaniards. In 2024, the average citizen has to do just that Set aside 47% of your gross salary to pay rent, compared to 43% in 2023.According to a study conducted by InfoJobs and Fotocasa. These data show two facts: prices continue to rise without a clear horizon for improvement, and the increasing difficulties that families face in reconciling income with basic needs.
In this context of historical increases –With increases of 17% not seen in two decades, according to Photocasa. The inevitable question arises: Is building more housing the solution to the housing crisis? To analyze this, four experts offer their vision on measures that can stop the rise in prices and relieve the pressure experienced by thousands of homes.
“By not creating new homes, there will be no supply.”
For Miguel Angel, representative of the FADEI Real Estate Association, the origin of the current market imbalance is unambiguous: The supply is completely insufficient in the face of demand that has not stopped growing. “It seems that due to lack of supply and high demand, prices have risen a lot. In other words, they have risen by more than 30% in two and a half years, in many areas, and even 40% in some.”
The director insists that this situation does not respond to a single culprit, but rather to years of accumulated inaction on the part of all departments. “There has been a stalemate for many years on the issue of affordable housing needs on the part of everyone…the department, the communities, a little bit of everyone, Everyone bears responsibility here, not just some“.
As detailed, this paralysis translated into a slowdown in the creation of new properties: “What happened? What? By not creating new homes, there will be no supply. “Then, because there is no supply, prices go straight up a lot.”
“According to the Bank of Spain, 700,000 homes are needed, okay? If there is a shortage of 700,000 homes and We make an average of 100,000 a year…so we’ll have seven years to go.“, calculates Miguel Ángel. But even these calculations, he warns, are optimistic. “Be careful, it would be if they were linear and homogeneous, but, among other things, Spain continues to increase its population, because immigrants and people come to live here.”
Building, yes, but more sheltered housing
For Maria Matos, director of studies and spokesperson for Fotocasa, though, at the origin of the housing crisis “several social, economic and legislative factors combined” that led to ““Structural imbalance between supply and demand”One of the most notable phenomena in this problem is the “almost complete disappearance of investment in public housing.”
He denounced, saying: “We depend on just over 350,000 homes, which is a ridiculous number and does not allow us to respond to the social demand that we have.” As he explains, this decline in sheltered housing has been very profound The market was left without the basic tool to contain prices.
The spokesman points out that sheltered housing production declined after 2013 and never recovered. “The first reason is the almost complete paralysis of sheltered housing since 2013. To get an idea; “Previously, about 60,000 subsidized homes were built annually, but today it hardly exceeds 10,000.”And he confirms. “That is, public housing construction is six times lower than before, with the population increasing by 4%,” the expert explains.
The consequences of this structural vacuum are clear, according to Matos: “We are forcing the last two-fifths of the population to pay the market price, which is the free market price, because there is no social housing, that is, there is no social housing.” “We are forcing them to go to the free market instead of going to the social market.”
The situation is exacerbated if expected population growth is taken into account. “If we take into account that projections in the next five years indicate that the Spanish population could grow by 2 million people, the reality is that we do not have enough housing. We are not ready to address this situation,” Matos warns.
Previously, about 60,000 subsidized homes were built annually, today only 10,000.”
For this reason, Fotocasa estimates that the country needs an unprecedented constructive effort to stop the crisis. As Matos explains, “We need 1.8 million homes, both for purchase and rent, to respond to the pre-housing crisis Where doors open for us.”
Protecting sheltered housing: “Let it be so forever”
Jaime Palomera, researcher and co-founder of the Institute for Urban Research (IDRA), goes further, saying that turning the housing crisis into an undersupply problem is “staying on the surface.” He realizes that “it is undeniable that in the past four years there has been an increase in population and this necessarily means that more homes are needed.” However, he warns against this “The housing problem is much more complex than a simple issue of supply and demand.”
Palomera focuses on the structural change that, in his opinion, explains a large part of the current tension in the market: “The decisive factor is the kind of use we give to housing. Governments have for years turned housing into a financial asset, just like gold or just like cryptocurrencies.” He asserts that this transformation is what created the homes “Products through which you can get rich, rather than just places to live.”
Palomera stresses that this phenomenon is not limited to Spain. “It’s an international problem. In many European countries, the United States, Australia and Canada, what we see is that rising housing prices coincide with two phenomena.” He explains that the first is related to “Demand for housing as an investment product, i.e. speculative demand.”
“If you want to get rich, put your money in cryptocurrencies, but not in houses.”
The second issue relates to “granting increasingly large real estate loans.” The result is what he described as a “rigged monopoly” that causes “more and more homes to be in fewer hands,” increasing inequality and financially benefiting those who already own homes.
Given this panorama, Palomera argues for the necessity of building more housing, but not at any price or of any kind. “We have to build, among other measures, But essentially what needs to be built is sheltered housing.”
The expert confirms that “all studies show that significant increases in protected housing and also in… Direct public housing helps calm down and reduce prices.”. On the other hand, he warns, “when market housing is built, because it behaves like assets, it drives up prices.”
According to Palomera, the international references that Spain should turn to are “Vienna and Singapore,” which “in addition to building a lot of subsidized housing, “They changed the game.”
This change means, for the researcher, amending tax incentives: “reducing taxes on those who work to buy the housing in which they will live,” and at the same time “raising taxes on those who own real estate, and what they do is buy houses to raise prices for use in seasonal tourist housing,” because “If you want to get rich, put your money in cryptocurrencies, but not in houses.”
Although, as Palomera recalls, Spain already had one of the largest production of sheltered housing in the world: “In Spain, a lot of sheltered housing was built, about 6 million. But Nearly all of those six million apartments have ended up on the market. He adds: If that had not happened. “At the moment we will be in the Champions League for sheltered housing in EuropeTogether with the Netherlands.
One example of how things should have been done, according to Palomera, is the Basque Country: “For more than 20 years, at the beginning of the 2000s, all the sheltered housing was built there, andHousing is protected in perpetuity, it cannot be privatized, and it cannot end up on the market.He added: “In his opinion, this is the way to stop speculation, ensure access, and reduce pressure on prices.
Delete ITP; More urgent than building houses
For Ricard, the president of Triokasa, the debate about long-term public housing lacks focus. Let us take into account that many administrations present ambitious plans, but they arrive too late. “We will build public housing within 10 years. Well, congratulations. But that’s not the point.”
In his opinion, efforts should be focused on projects that will take a decade to implement. It ignores the true urgency of the problem, which is already affecting thousands of homes Who cannot free themselves or afford the current costs of renting and purchasing.
“The problem is that they are removing the famous ITP, not for everyone, this obviously does not make sense for investors, but for families with certain incomes, for example, who are being liberalized for the first time, please, let’s remove the ITP.” For him, allocating current resources to eliminate this tax would have an immediate and much more beneficial impact than “investing the money raised to build social housing that will be built ten years from now. We are facing the problem now, and we will not face it in the future.”
For the expert, an example of good measures are the credits provided by the Catalan Financial Institute. “Those under the age of 35, whose income does not exceed a certain amount, They give them a maximum of €50,000 to buy their first homeas a loan with an interest rate of 0 euros, which begins to be repaid when the mortgage is actually completed.”
This assistance allows many families to obtain relatively affordable housing once the ITP is paid. Moreover, it ensures that the property remains under an official protection system: “On the day you want to sell it, you cannot sell it at the price you want, but it has to be regulated by the independent community,” Ricard explains.
Post-construction: guarantees for owners
Rebecca Perez, CEO of Inviertis, cautions against focusing solely on new building construction The housing crisis will not be solved immediately. “We all understand that new construction housing costs more than rental housing: it takes at least a year and a half or two to complete the work,” he explains.
For her, this waiting time exacerbates a problem that was already prohibitive: many people cannot access rent or purchase, generating an “endless loop” that keeps pressure on the market.
His proposal aims to encourage rentals as an alternative to ease stress about buying homes. “Rent policies must be deregulated. We must make it easier for those who want to rent, and give them a legal framework to do so.” “It allows you to rent without the risk of someone camping out in your house forever.” suggests.
Moreover, it emphasizes that any housing access policy must take into account taxes as a major factor. “And we have to guarantee access to housing; there are people who cannot buy because of taxes. In Catalonia we pay 10% ITP.”