Housing deficit in Spain: the IMF calls for faster construction
Last Updated on 23 July 2025 by Urbanitae
At a time when access to housing has become one of the main social and economic concerns, the International Monetary Fund (IMF) is urging Spain to build more housing, issuing a clear warning: more housing must be built to contain price increases and ensure market stability. The international organization has called on the Spanish government to adopt structural measures to increase the housing supply, streamline construction permits, and unlock available land. This diagnosis brings not only challenges for public administrations but also opportunities for new investment models, such as real estate crowdfunding, which can accelerate new housing developments amid growing demand.
In this context, José Ramón Pin Arboledas, emeritus professor at IESE and former member of the Spanish Parliament, emphasizes that the main obstacle is neither technical nor economic, but political: “Housing policy is a ‘matter of state.’ It cannot be addressed by a single political party alone. Broad consensus within and between political parties is needed so that measures are stable and implemented across all three levels of government: central, regional, and local.” According to Pin, without such consensus, “the situation will be very difficult to resolve.”
Scarce land, slow permits, and the need for regulatory reform
In its latest report on the Spanish economy, the IMF warns that the sharp rise in housing prices must be tackled through measures that expand supply, beyond current policies focused on demand or tax incentives. However, this is not a recent issue: Spain has suffered from a severe structural housing shortage for years, worsened by insufficient construction. According to BBVA Research, regulatory bottlenecks and legal uncertainty are key factors explaining why far fewer homes are built than needed, with only around 128,000 homes constructed annually compared to estimated demand exceeding 300,000 units.
José Ramón Pin stresses that “measures must fall into three categories: financial, administrative, and labor-related.” Among the administrative measures, he highlights the need to “streamline the designation of urban zones around cities” and “speed up the permit-granting process,” which aligns with the roadmap proposed by the IMF. “Spain’s population is growing, both permanent and temporary, so the lack of housing could become a bottleneck for economic development,” he warns.
The scarcity of land available for new housing construction—especially in urban areas where price pressure is greatest—is one of the main barriers to stabilizing the market. In many cities such as Madrid, Valencia, or Barcelona, the urban planning process for a new development can take more than a decade, delaying project execution and driving up costs. In response, the government has proposed a reform of the Land Law, which the IMF considers a priority, aiming to make land classification more flexible, reduce bureaucratic hurdles, and facilitate residential development. The European Commission has also urged Spain to adopt effective measures to accelerate housing supply and improve affordability, highlighting the urgency of addressing the structural factors limiting housing production.
One of the pillars of this strategy is the promotion of social housing—a field in which Spain lags behind its European neighbors. According to the Ministry of Housing and Urban Agenda, the stock of subsidized housing represents only 3.4% of the total, far below the EU average of 8–9%.
Financial stability at risk if imbalances are not corrected
The ongoing imbalance between housing supply and demand not only hinders affordable access but also poses a real threat to Spain’s macroeconomic stability. As the Bank of Spain warned in its latest report, housing demand growing faster than supply continues to drive price increases and widen the housing deficit. This means that as long as this dynamic persists, households will continue to allocate a larger share of their income to mortgage or rent payments, increasing the risk of default and creating greater vulnerability in the financial system.
This is echoed by the IMF, which warns that limited access to housing is having widespread social and economic consequences. The IMF highlights, for example, how high prices are delaying young people’s independence, hindering labor mobility, and even forcing many families to leave urban centers due to unaffordable costs—leading to growing territorial and social inequality.
Pin Arboledas agrees with this assessment: “The lack of housing could become a breeding ground for social tensions, leading to unrest and, in some cases, increased crime. Spain is a country with a high quality of life, but that quality could deteriorate due to the housing shortage, undermining tourism growth and talent attraction.”
The expert also points out that there are immediate measures that could help contain rising prices: “One of them is to bring many ‘frozen’ properties back onto the rental market. To do this, an urgent legislative change is needed to protect property owners,” he says, referring to the need to speed up evictions for non-payment or illegal occupation and to hold public administrations accountable in cases of vulnerability.
Urbanitae and the potential of real estate crowdfunding
In this context of supply shortages and the need for agile financing of new developments, platforms like Urbanitae represent a key tool for boosting residential promotion. Through real estate crowdfunding in Spain, Urbanitae channels private savings into real estate development, allowing thousands of small investors to invest in property projects with low minimum contributions and diversified exposure.
This alternative financing model not only helps boost new construction in high-demand areas but also reduces dependence on bank credit and improves fundraising efficiency. With over 200 projects funded across Spain, Urbanitae’s operations show that it is possible to invest in real estate crowdfunding profitably and with social impact.
José Ramón Pin emphasizes the need to support public-private partnership (PPP) models as a way to overcome the housing access crisis: “Private initiative and public-private collaboration are the fastest mechanisms for responding to the crisis, but this requires streamlining administrative processes, creating urban land, and facilitating financing for key industry players.”
