This article is part of The Housing Fix, a series of dialogues that explore the intricacies and ways of tackling the affordable housing crisis in various cities around the world.
Last April, dozens of people took to the streets in Spanish cities, including Barcelona, to denounce exorbitant rental prices amid the housing crisis. Spokespeople for the demonstrations asserted that these protests mark a historic moment. Since 2011, the homeownership rate in Spain—one of the highest in Europe—has decreased by 11.8 percentage points (from 83.9% to 72.1%). Among the young population, this decrease is much higher. However, 2024 has seen the most activity in the housing market since the real estate bubble. The competition in the rental market has reached unprecedented levels. So, who is buying or renting in Barcelona?
I sat down with four voices on the issue of affordable housing in Spain, and particularly in Barcelona: Sergio Nasarre-Aznar, Professor of Civil Law and former director of the UNESCO Housing Institute; Carme Arcarazo, Researcher at the Barcelona Urban Research Institute and spokesperson for the Barcelona Housing Union; Miren Telleria Ajuriaguera, Head of Real Estate at PricewaterhouseCoopers; and Lorenzo Vidal, María Zambrano Research Fellow at the Faculty of Political Science and Sociology at Universitat Oberta de Catalunya.
What follows is a lightly edited transcript of a conversation in Spanish that took place on June 16, 2025, over a video call.
Susana F. Molina: Could you explain the current situation of the real estate market in Spain?
Miren Telleria: We should differentiate between new construction and secondhand housing. While it is true that the housing transaction rate in 2024 was 636,909—very close to the figure from 2022, which experienced the most activity since the bubble—new construction last year totaled only 135,000 homes. This number falls far short of the approximately 70,000 new families created. Additionally, these new homes are not always built in locations where demand exists, and correcting this imbalance is not a quick process, as it requires access to available land and permits. The 2007 real estate crisis led to the disappearance of many small builders and developers who were in financially precarious situations; new developers must now adhere to much stricter financing requirements.
If demand grows significantly while supply cannot meet that demand quickly, it creates the tension we see in the market today. Currently, there is pent-up demand, which drives up prices and creates a host of disadvantages, including fierce competition between buyers and tenants. The reality is that all our clients who build reasonably and adapt to areas of high demand are successfully selling and renting their properties.
Carme Arcarazo: I would like to add that we cannot understand the housing market solely through the lens of supply and demand. We have experienced it already in this country. The years with the highest supply growth and construction rates were also the years when prices surged the most. We must also distinguish between real demand—reflecting a genuine need for housing—and investment demand, which often fails to address the need for access to housing, instead following a dynamic that is typically speculative and unconcerned with social needs. In Barcelona, as well as throughout Spain, numerous examples can be found, including housing for tourism purposes, seasonal housing, vacant apartments, and underutilized apartments. In other words, a significant portion of these transactions serve little to no residential purpose, which I believe contributes to the high transaction levels in the market.
Spain is one of the OECD countries with the highest number of homes per capita. In this country, there are more than 550 homes for every 1,000 people. Therefore, it’s essential to address these antisocial uses of housing before considering new construction, as was done in the years leading up to the real estate bubble. To find solutions to the housing crisis in Barcelona and Spain in general, we should focus on how to ensure that the existing housing stock is efficient, both in terms of its use—that it’s used so people can live in it—and in terms of its physical condition.
Susana F. Molina: In Barcelona and Spain overall, the percentage of homeowners has historically been high compared to countries like Germany. However, this percentage is declining. What factors have contributed to the collapse of the property-based model that had been taking shape for decades?
Lorenzo Vidal: Well, first of all, I would like to clarify that this situation has not always existed. Until the mid-1950s, renters were the majority in Spain. Access to homeownership has been the result of public policy rather than a cultural or natural phenomenon in Mediterranean countries, as is often claimed. This property ownership model was politically constructed through new construction and subsidized housing, which beneficiaries could resell later, along with the expansion of credit before the mortgage crisis.
There is another factor that is less often discussed: the transition in ownership regimes for existing housing stock. During the Franco regime, rigorous price controls were imposed on all privately rented homes, resulting in landlords receiving very low rental returns. At the same time, a law was passed to divide horizontal property, allowing owners to sell their housing units individually.
Following the real estate crisis, private rental housing has experienced a resurgence, which is at the heart of the current housing situation. This market experiences a power imbalance, with a lack of regulation creating unequal conditions between landlords and tenants, which in turn leads to housing insecurity. So, what do we do with the private rental housing stock that has emerged since the last crisis erupted if new construction isn’t going to be a way to truly change the price dynamics in established urban areas in Barcelona and other cities? What is important to emphasize is that there is no need to repeat what was done in the 1960s to try to return this rental housing stock to individual ownership; alternative models exist. In Denmark, housing cooperatives were established to create a common asset that is available from one generation to the next. We need to consider whether we want to return to this model of a homeowners’ association, which we view as not universally applicable, as attempts to extend it generate bubbles, a crisis in access to housing, and growing inequality between those who own property and those who don’t.
Carme Arcarazo: In Spain, there are increasingly more renters; that is, fewer people own property, and wealth is accumulating, with more housing in fewer hands. Furthermore, one in ten homes is currently empty. According to the INE (National Institute of Statistics), 10% of the rental market is empty, representing 3.8 million homes. This is often said to occur only in villages or uninhabited areas, but that’s not the case. Fifty-five percent of vacant housing is in municipalities with more than 10,000 inhabitants, where 80% of the population resides. A total of 1.1 million unoccupied homes are located in provincial capitals and cities with more than 50,000 inhabitants. The example of Barcelona is interesting because, on the one hand, according to data from the National Institute of Statistics (INE), there are more than 103,000 empty homes. Although the City Council verified that there were indeed more than 100,000 homes with very low water consumption and no registered residence, they were nonetheless not abandoned or empty. Quite simply, a large portion of the housing stock is underutilized, not regularly used by a family living there permanently, but perhaps by someone who bought it as an investment and comes for a month a year or by someone who bought it to obtain a type of visa, etc.
There is also data indicating that 10% of the rental stock is sequestered for tourist use. And when we look at the entire supply of newly built housing, a large portion is for seasonal uses and other uses that are not entirely residential. It’s interesting to examine the municipalities that are experiencing population loss. Municipalities such as Las Palmas, Valencia, and Cádiz have experienced a decline in their resident populations from 2011 to 2021. Therefore, if market theory were effective, with less demand, prices would have to drop; however, this hasn’t been the case. In those three municipalities, prices have risen over the last 10 years: 42% in Las Palmas, 40% in Valencia, and 26% in Cádiz.
Susana F. Molina: Many of the activist movements in Barcelona and Madrid protesting the housing crisis focus on the purchase of buildings by real estate funds. However, little is said about the exponential growth in individual foreign demand in recent years. How do you think this influences access to housing for the local population?
Sergio Nasarre-Aznar: The Association of Registrars (Colegio de Registradores) has released the most reliable data on this matter, indicating that home purchases by foreigners have increased by 15%. In 2009, the average was 4%. Some regions are particularly blatant, such as the Balearic Islands, where the figure reaches 30%. To what extent have housing policies contributed to this? For me, this is the big question. Our research indicates that the housing policies of the last 17 years, particularly Laws 1/2013 and 5/2019, have significantly increased the difficulty for families to access private property, resulting in a 5% decline in the homeownership rate in Spain since 2007.
Therefore, is it understandable that foreigners buy? Well, if the policies make it difficult for the middle and lower classes to buy, then others with enough capital will do so no matter how many obstacles they face. Until nine years ago, funds managed a small stock of 2.5% or 3% of the housing stock. In the last eight years, this percentage has doubled. Therefore, private property isn’t disappearing; others are simply buying it, and the vast majority are being forced to rent. But of course, they’ve been forced into a precarious rental market, and that’s where everyone has found themselves: divorced families, restructured families, second homes, young professionals, foreigners, and funds. The problem now is the rental market. It already happened in 2016, when rents began to rise exaggeratedly because Spain is a country where renting has never worked well.
Since private home ownership was democratized, buying has consistently been more economically advantageous than renting (except between 2009 and 2012). The ability to buy one’s own home has been a social achievement that began with the French Revolution but only became a reality in the 1960s, thanks to the horizontal property law, as Lorenzo mentioned. So many people in Spain have fought for private home ownership.
Regarding the empty homes Carme mentions, it’s challenging to determine how many there are and the reasons for their vacancy. At the beginning of the crisis, in 2007/2008, an economist calculated how much it cost to have an empty home, including the opportunity cost, and concluded that it made no economic sense. Therefore, the housing vacancy is clearly due to the legal uncertainty that exists in Spain regarding urban rentals. Since rent control has been implemented, the residential rental supply in Catalonia has dropped by 19%, according to data from the Catalan Property Agency. And where has this rental supply gone? Well, Barcelona is the city in Spain where seasonal rentals have increased the most.
This isn’t right because it’s making the rights of those with less purchasing power—middle-class families and below, young people, etc.—more precarious. According to Idealista data, there are already contracts for €1,000 per room, which also don’t meet any of the United Nations’ requirements regarding standards for decent and adequate housing.
Susana F. Molina: In the PwC report “Economic and Business Consensus,” which analyzes the problem of access to housing in Spain, business leaders consider the leading causes of rising housing prices to be a lack of supply and inadequate legislation. Could you explain this in more detail?
Miren Telleria Ajuriaguerra: If we analyze the margins of developers, they haven’t grown substantially compared to the rise in prices. One of the main reasons is the profitability required to cover the capital needed for building. The real estate sector requires a lot of capital to build housing, but neither the state nor local private capital can provide sufficient capital, making Spain a clear capital importer. What happens is that if current legislation doesn’t allow for certain transparency in licensing response times and traceability over time, then the greater the risk, the higher the return on capital, and ultimately, prices rise.
For example, public-private partnership projects offer lower returns, but in exchange, they assure that the home will be rentable. It also means that the type of capital willing to invest in them is willing to accept lower returns.
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Carme Arcarazo: The issue of housing capital in Spain seems extremely interesting to me, and researchers outside of Spain are also discussing it. In other countries, there is a type of capital that, for example, is more accustomed to limited profits. This capital, at its core, is more similar to industrial capital, which seeks long-term profits and, therefore, can settle for lower returns in the short term. However, the Spanish real estate sector is a system heavily reliant on developers, which prioritizes short-term returns. There is no legal framework that clearly distinguishes between for-profit entities, those aiming for limited profit, and those that are non-profit.
Susana F. Molina: Based on the causes of the housing crisis in cities like Barcelona, what possible solutions would you propose?
Lorenzo Vidal: The promotion of social housing for sale is a waste of public resources because only the first buyer benefits, but the next generation won’t be able to access that resource because that first beneficiary will be able to take a subsidized resource and put it on the market. So, all that commonwealth that could have been created for public access, generation after generation, is privatized, generating inequality, which is perpetuated by inheritance, because we live in a country with very high-income inequality but much more unequal in terms of wealth.
Owners and landlords are increasing their wealth, and a much more precarious tenant population with much lower incomes is transferring an increasingly larger portion of their income to landlords. Therefore, the renting population cannot save to buy a home, make a down payment on a cooperative, consume, or contribute to a better-functioning economy. And a minority, who are in some ways the result of the mortgage bubble model, are increasingly accumulating wealth at the expense of these rents. So, we are truly in a situation where the rental market has become a driver of inequality and a massive regressive transfer of income. And if we don’t regulate, if we don’t set limits, then this will create a vicious cycle that will only worsen.
Perhaps it is also a generational issue because the two of us [Carme] who are probably a bit critical of this property ownership model are young people without property who have come after those who were able to buy in an easier macroeconomic and policy context. They don’t see it the same way. I am not against people owning their own homes. The solutions stem from an attempt to create a common asset based on a rental market, which for-profit landlords currently dominate. We should explore alternative formulas, such as cooperatives or limited-profit housing associations, which have a significant presence in countries like Germany and the Netherlands.
Carme Arcarazo: If, as Sergio said, the middle and lower classes can no longer compete with the prices that the funds and those who already own a lot of properties can pay, then let’s eliminate that segment of the market; Amsterdam has just done it. You can only buy a home in the city if you’re going to live in it or if you’re going to offer affordable rent; otherwise, you can’t buy it. If you want to buy to live in for a month a year or for tourist rentals, etc., you cant buy. Anyone who wants to buy a home in Barcelona should be able to do so, but what’s unfair is accumulating housing in stressed areas that are at the center of the crisis, taking advantage of the fact that others won’t be able to buy and then charging them €3,000 in rent. Some are strongly against rent regulation and price caps because they affect many privileges.
Miren Telleria: There’s a fundamental error that’s been said here about the funds being able to pay more. The funds have certain returns that their capital seeks to achieve. So, if they’re looking for a zero-risk rental, someone they know will pay rent regularly, they’ll look for a very low return (like a government bond). But if it’s a property where tenants may not pay, or there’s uncertainty about the license, they’ll ask for a much higher return. We mustn’t forget that Spain has the oldest housing stock in Europe, and institutional housing stock is of substantially better quality than private housing stock because investors know that housing stock in good condition is more liquid.
What we can’t expect is for a risky activity not to generate a profit. Another thing is that we prefer the type of capital invested in construction to be credits or loans granted by public entities or financial institutions for social purposes rather than seeking economic profit. Therefore, some aspects can be improved in terms of regulation to bring soft capital to our country. We have clients who are sovereign wealth funds that request a very low return, and that’s the capital we aim to attract for cooperatives, limited-profit funds, and SVICs (Sociedades de Vivienda de Interés Comunitario), which are a recently created legal entity to promote non-speculative housing models based on common interest, sustainability, and collective ownership or use.
Sergio Nasarre-Aznar: According to the European Central Bank, Spain ranks fifth in Europe in family equality, thanks to the fact that the vast majority of Spanish families own their homes. Therefore, if we’re seeking family equality, the key lies in private ownership. There are no magic solutions to the complex housing problem. However, rent controls, fines, sanctions, and expropriations have been detrimental to access to housing, to the point that families will be significantly more over-indebted in 2025 due to housing than they were in 2004, during the real estate boom. Therefore, the key to solving the housing crisis lies in making it easier rather than more difficult to buy a home in Barcelona or any other city. Mechanisms such as shared ownership and Catalan temporary ownership, implemented in Catalonia since 2015, allow families to own property without becoming over-indebted. We must not accept a society of wealthy homeowners and poor tenants, nor policies that lead to the precariousness of the rights of the poorest, such as cooperatives, or that create dependence on politicians, as seen in the widespread use of social rental housing.
