The Spanish residential market is facing an increasingly evident paradox: demand is growing, becoming more diverse and more demanding, while supply still fails to advance at the pace required. The lack of shovel-ready land, slow administrative processes, rising construction costs, and regulatory rigidity are limiting the sector’s ability to respond to a major social and economic need: producing more housing.
This was one of the main conclusions of the editorial breakfast organized by Observatorio Inmobiliario, where various industry representatives analyzed the new residential cycle. Urbanitae was represented by Juan Mínguez, Head of Debt, who shared our perspective on the role of alternative financing in a market that requires new formulas to drive viable projects forward.
The event brought together professionals linked to development, consulting, architecture, asset management, sustainability, technology, and financing. Participants included Álvaro Alonso, Head of Living at Cushman & Wakefield; Daniel Toribio, CEO of Vivia; Miguel Silmi, Managing Director of Homes by Gestilar; Ana Martínez de Lizarrondo, Spain Director at Urban Campus; Angélica Tarrasa, Segment Buildings Marketing Manager at Schneider Electric; Patricia Rodríguez, Certification Manager at BREEAM Spain; Aurelio Rodríguez, Business Director at Argis; Diego Escario, architect at Cano y Escario Arquitectura; and Jorge Ginés, Managing Director of Asprima.
Demand no longer responds to traditional models
The starting point was clear: Spain is building fewer homes than it needs. While annual housing production stands at around 80,000–90,000 units, the creation of new households is progressing at a much faster pace, generating an accumulated deficit that several analyses estimate at hundreds of thousands of homes.
But the problem is not only quantitative. The nature of demand has also changed. Households are smaller, labor mobility has increased, remote work has transformed residential habits, and many users are seeking more flexible solutions, especially in major cities such as Madrid, Barcelona, Valencia, and Málaga.
In this context, formats such as flex living, coliving, student housing, and senior living are no longer viewed as niche products, but as concrete responses to new social needs. They offer more compact units, shared services, professional management, and a residential experience better adapted to users who increasingly behave like customers.
The regulatory bottleneck
One of the most repeated points during the breakfast was the difficulty of adapting urban planning regulations to this new reality. Many master plans were designed decades ago, in a social and economic context very different from today’s. Rigidity in changing permitted uses, differences between municipalities, and the discretionary interpretation of certain urban planning criteria create uncertainty for developers, operators, and investors.
Jorge Ginés, Managing Director of Asprima, summarized it with a particularly illustrative statement: “We need urban planning to be liquid and flexible. It cannot be deterministic, and structural changes cannot become a burden.”
As highlighted during the discussion, the result is a market in which each project tends to become a unique case. This makes scalability more difficult, increases costs, and reduces the sector’s ability to industrialize solutions. At a time when housing requires scale, agility, and efficiency, the lack of regulatory consistency becomes a major barrier.
The role of local administrations was also emphasized. Many municipalities lack the technical, human, and technological resources needed to process permits and changes of use at the speed demanded by the market. This directly affects project viability and, ultimately, housing availability.
Profitability: less price growth, more efficiency
The profitability of new residential models was another major topic of discussion. In a context of elevated costs and rents that are beginning to hit affordability limits in certain markets, the sector can no longer rely solely on rising prices.
Juan Mínguez emphasized this point, noting that “the secret to profitability lies more in scale, in managing a volume of units that allows for efficiency, than in continuing to raise rents.” In his view, there is still some room for rent growth in certain markets, but it is becoming increasingly limited: “In terms of rents, it is difficult to continue increasing them; the key lies in the cost base, in acquiring assets well and repositioning them efficiently.”
This perspective connects with a broader transformation in the sector. Operators are gaining importance, technology is becoming essential for controlling costs, sustainability is no longer a secondary element, and professional management is making the difference between viable projects and projects that fail to meet their objectives.
As Mínguez summarized, profitability increasingly depends on “operational models at scale that allow efficiencies to be generated.” Buying well, managing well, and knowing how to reposition assets are now just as important as location.
Alternative financing as a complement to banks
In this context, financing is also evolving. Real estate is a capital-intensive activity with long timelines and different financial needs at each phase of a project. Traditionally, banks have played a central role, but in recent years complementary financing formulas capable of assuming different risk profiles and providing greater flexibility have gained relevance.
“Urbanitae is part of an alternative financing ecosystem that complements the banking sector,” Mínguez explained during the event. “It operates at moments and with risk profiles that are different.”
This complementarity is especially relevant in phases where developers need capital before bank financing becomes available, or in structures that require greater flexibility. However, this capacity also requires analysis and discipline. As Mínguez reminded attendees, “each transaction must be analyzed on its own merits.”
From our perspective, this is one of the keys to the new cycle. It is not about financing any project, but about identifying transactions with solid real estate fundamentals, adequate guarantees, solvent developers, and balanced risk structures. In debt financing, this means analyzing the location, the asset, the urban planning situation, costs, timelines, exit strategy, and the quality of guarantees.
Mínguez also highlighted an important distinction: an alternative lender may assume certain risks that banks do not always take, but not every type of risk. “I can take timing risk,” he noted, “but not binary risk, a one-or-zero risk.”
A challenge that requires collaboration
The breakfast left one clear conclusion: the Spanish residential market has demand, capital, and investor interest, but it needs to resolve structural bottlenecks in order to transform that potential into actual housing supply.
The lack of land, labor shortages, regulatory rigidity, construction costs, and slow administrative processes are limiting housing production. At the same time, changing demand requires the development of new residential models that are more flexible, efficient, and professionally managed.
At Urbanitae, we believe that alternative financing can play a relevant role in this scenario. Not as a substitute for banks or as a single solution to the housing problem, but as another tool to channel capital toward viable projects, accelerate certain development phases, and help more operations move forward.
