Bank of Spain Says Housing Gap Reaches 750,000 Homes, With Shortages Concentrated in Six Provinces

“Residential supply has failed to keep pace with rising demand,” the Bank of Spain says in its 2025 annual report on the performance of the national economy. The institution estimates that 750,000 new homes would be needed to close the gap between newly formed households and the available housing stock.

Experts at the bank warn, however, that the shortage is unevenly distributed across Spain’s provinces. In Ávila, 58.2% of properties in the housing stock could potentially be brought onto the residential market, compared with just 9.9% in Madrid. The national average stands at 27.1%. After the capital, the provinces most affected are Barcelona, Alicante, Valencia, Murcia and Málaga.

The Bank of Spain also notes that the available supply is constrained by the continued use of homes for tourist or short-term rentals — around 400,000 properties — as well as by second homes owned by residents and non-residents. “Between 2021 and 2025, home purchases by non-resident buyers accounted for 7.4% of the total, with an annual average of 50,000 dwellings,” the report says, adding that the issue is especially acute along the Mediterranean coast.

Another contradiction lies in the fact that around 450,000 homes built during the property boom of the 2000s remain vacant. Many are unsuitable for family living because of their location or poor condition.

Housing supply constrained by regulation, labour shortages and changing demand

“Spain and Portugal,” the annual report warns, “stand out among the economies where the growth in new housing construction has lagged most behind the increase in resident households,” with cumulative housing shortfalls of 6.6% and 3.7% respectively in relation to the existing stock.

Portugal, which is also facing a severe housing crisis, particularly in its largest cities, has an estimated shortfall of 300,000 homes, compared with Spain’s 750,000. Italy’s deficit is estimated at 400,000 homes. France remains broadly balanced, while Germany is the only major eurozone economy to have reduced its housing deficit, improving it by 0.5%.

In Spain, housebuilding has been slowed by bureaucratic obstacles and overlapping regulations between different levels of government, including municipalities, regional authorities and the state. Slow urban planning procedures, a shortage of skilled labour and declining productivity have also limited the growth of supply.

“In the six major urban areas, where 36% of households live, the number of homes that could be built but have not yet been started would be around 1.1 million,” the Bank of Spain notes. However, “the potential number of homes planned in the capitals of the six major urban areas falls to around 320,000.”

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