No quick fix: Spain needs eight years to plug 740,000-home housing gap

Spain could need at least eight years to address its housing shortage, even if construction more than doubles from recent levels, according to the Real Estate Market Report 2026 from OBS Business School.

The report estimates there is a deficit of around 740,000 homes. Since 2021, approximately 1.2 million new households have been created, compared with just 474,000 completed homes.

The growing gap between supply and demand is also contributing to rising property prices and worsening affordability, particularly in popular tourist areas.

Housing shortfall

OBS estimates that more than 230,000 homes would need to be developed every year for eight years to close the gap.

This would represent a 128 per cent increase on the 2024 construction rate, illustrating the scale of the challenge facing Spain’s housing market.

The shortage is particularly serious in areas where population growth and housing demand are strongest.

Limited available land, planning procedures, labour shortages, financing difficulties and rising construction costs are among the barriers to increasing supply.

Even with a significant acceleration in construction, the report suggests resolving the shortage would therefore be a long-term process rather than something that could be achieved within just a few years.

Prices and affordability

Housing prices have meanwhile risen to an average of €2,429 per square metre, 36.5 per cent above their 2007 peak.

Affordability is also worsening. An average household now spends around 44 per cent of disposable income on the first year of a mortgage.

In tourist areas such as Benidorm and Marbella, the figure can exceed 80 per cent, placing considerably greater pressure on households trying to buy property in locations where demand is particularly high.

Rental supply is also tightening, with 14,000 fewer properties available in 2026.

The combination of fewer available homes, higher purchase prices and tighter rental supply continues to make finding affordable housing difficult in many parts of the country.

Luxury homes

At the opposite end of Spain’s property market, the country’s most expensive home currently for sale is a €70 million villa on Marbella’s Golden Mile, according to idealista.

The 13-bedroom Bellagio property includes several pools, a gym, sauna, bowling alley and cinema.

Spain’s ten most expensive properties are all located on the Costa del Sol or Balearic Islands, underlining the extraordinary prices being commanded at the very top of the country’s luxury property market.