Lessons on Housing Crises from Spain

A few months ago, I published part one of this article, when Spain’s housing reforms were still nascent. I am glad now to see that, fulfilling previous promises, the Spanish PM has honoured his word and taken substantial steps towards implementing public housing policies. From making the purchase of houses for non-residents more difficult, to facilitating young people’s renting and buying of residences, and unifying countrywide and regional initiatives, much has been done recently.

You would not believe Spain is currently undergoing a severe housing crisis by looking at mortgage data. Registered mortgages and their value have increased significantly, reaching historic highs in 2025. A lot of people are buying houses, yes, but hidden behind a booming housing market lies the reality of a disparagingly low supply for an ever-rising demand. Moreover, while mortgages are relatively easy to obtain, the real challenge is the down payment. In order to buy a house, usually 20%-30% of the total price is to be paid in advance. Down payments are covered by savings, and in today's economic landscape, having a salary that allows you to save such extraordinary amounts is a rare privilege requiring years of frugality and commitment. Furthermore, an extraordinary percentage of Spanish houses do not go to Spanish people nor residents. Spain, the forever-sunny and cheap holiday paradise of Europe, is facing a rising demand for houses by foreign non-residents. These foreigners usually come from richer countries and can afford the elevated prices of our housing market, therebu worsening it. For that reason, the Spanish PM fought back by proposing a 100% tax on houses bought by non-EU nationals. EU nationals are only exempt due to European regulations. Tourist ‘hot-spot’ provinces like Alicante, Málaga, the Canary and Balearic Islands have much to thank the Spanish government for. 

Young people are the lucky beneficiaries of the majority of Pedro Sánchez's policies. For renting, working Spanish nationals aged 18 to 35 are eligible to receive a 250 EUR monthly subsidy to cover living expenses. This measure is aimed at easing the process of emancipation from parents. A dire need considering that Spain’s average emancipation age is 29 years old for women and 31 for men, the fifth oldest of the EU, and over 4 years the European average. In the realm of ownership, huge steps are being taken as well. In September 2025, Sánchez announced an almost 30,000 EUR aid on rent-to-buy programs under the Estate’s Housing Plan for the 2026-2030 period. Paid rent is to be deducted from the purchase price, effectively employing rent as an advance payment on a future purchase, plus the relevant properties will fall under permanent state protection. Prices are to be static and unchangeable by the seller, helping to put a stop to housing speculation.

Potentially the biggest and most innovative reform geared to solve the housing crisis is the creation of Sepes. Sepes is the digital public platform that will list rental properties below market price. Similar to Idealista — the leading online portal in Spain for property renting — but with the distinct mission of increasing the availability of affordable rental housing. It will start by offering 100,000 homes with rents not exceeding 30% of family income. Many of the listed properties will come from Sareb — Spain’s so-called ‘bad bank’ —, amounting to 40,000 of total homes. Even though social housing is far from new in Europe, it is the first nationwide effort for transparency in access to housing processes. Traditionally, housing agencies use internal digital tools for allocations, whereas Sepes is expected to be a unified system encompassing public listings, applications and, contract management for citizens to browse easily and freely. 

Spain’s example should be formative for policymakers seeking effective methods to address housing crises, as it proffers a number of lessons. One must select the most-affected constituency (usually young people), understand the root of their difficulties, including low wages compared to the purchasing power of foreigners, and subsequently act accordingly, offering public housing that matches Spanish people's means and needs. Public housing is an excellent alternative to brutal and uncontrolled market prices worldwide. Moreover, the emergence of such new solutions for old problems should prompt reflection on the need for innovation in public policy, such as the introduction of digital nationwide public service portals such as Sepes’s. Among the turbulent waters of today’s political Europe, where right and far-right wing discourses are proliferating in defence of a brutally unrestrained private market, socialist Spain is a solitary stronghold of social security and people’s rights. Ultimately, if you are young, Spanish, and looking to settle down and buy a house, this is the perfect time under the most supportive and enabling government to do so.

Image: Flickr/Luc Mercelis

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