Spain’s economy is doing well in comparison to many other European countries. However, for the average person living in Spain it’s difficult to find an affordable property to rent or buy. Build more! Is the IMF’s advice. Would this solve the problem and if not, what will?
If you are landlord of a property in Spain then you may be feeling pretty confused at the present time. The ground seems to be constantly shifting in relation to what rental property owners are and are not allowed to do. The latest being the Supreme Court’s announcement that Spain’s national rental registry must be removed.
This and other measures, such as capping the number of short-term rentals in different regions, have been introduced largely in a bid to enable ordinary Spanish people to buy or rent property in line with their wages. An average take- home pay can be around 1,900€ with house rental touching on 1,000 € of that. At more or less 50% of available income, this is a sizeable chunk. Recommended housing cost is around 30-35% and some rental agencies require proof of income that reflects this.
What the International Monetary Fund (IMF) is saying is that the affordability issue needs to be addressed through increasing the new-build stock available rather than focussing on property rentals. The level of legal uncertainty is off-putting to those with the investment potential and the developers who could make a difference by building more. The demand is there but supply is lacking and current approaches will not help.
The IMF suggests that improving building-licence procedures and reducing legal uncertainty will enable faster urban development. The legal uncertainty they refer to is the clampdown on lettings being administered through changing the rules and regulations.
Whether any new-build will be in the price bracket of the average worker, is unlikely however and this still remains a problem. Spain does not have much public or social housing. Only 2.5% of housing stock comes into this category in comparison with a European Union average of 9.3%.
For those living in some urbanisations in Spain, there might appear to be another solution. In close proximity to some of the areas where houses are being built, there can be abandoned properties. These properties can become victim to squatters whose illegal possession of the property means that they are not contributing to the system which can create hostility in the local area.
The reasons these homes are abandoned can be complex but many are those previously owned by people who have since died and whose relatives, for whatever reason, have not completed the necessary property transfer paperwork. Some properties have huge debts held against them which no one wants to inherit and buildings fall into a spiral of neglect.
Most people agree, addressing affordable housing shortage in Spain is an urgent necessity. The issue of how this can be achieved is likely to be debated for some time to come.
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2 comments
1 July, 2026 1:57 pm
Local builders should be told to build more social housing and not concentrate solely on homes for overseas buyers at prices that the average Spanish employee cannot afford. Most of the builders in holiday areas are building expensive houses that only expats can afford and are left idle for most of the year.
14 July, 2026 8:54 am
We understand your point, and it is certainly true that affordable housing is an important issue in many parts of Spain.
At the same time, both types of development can play a role. Social and affordable housing is essential for local residents, while homes purchased by international buyers also contribute to the local economy through investment, taxes, employment, and spending on local businesses and services.
Ideally, there should be a balanced approach that increases the supply of affordable housing for local people while continuing to encourage responsible investment from overseas buyers. In the end, increasing the overall housing supply and ensuring a good mix of developments is likely to benefit everyone.
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