Population of only 5 crores, so shortage of houses in Spain… why not construction?

In many countries around the world, the population is growing rapidly and with it the demand for houses, but the story is a little different in the European country of Spain. The population here is around 5 crores, yet people do not get houses to live in. The situation has become such that it is becoming difficult for the common man to buy a house on rent, let alone buy a house of his own. Housing shortages and skyrocketing rents fueled public anger so much that millions, if not thousands, of workers took to the streets.

On November 11, nearly 4 million workers in Spain participated in a nationwide strike. Demonstrations took place in major cities such as Madrid and Barcelona. At some places the protesters set fire to properties and also ransacked. The police had to use force to control the situation. The crisis in Spain is not just about housing shortages, but behind it are problems that have been going on for many years.

There are many reasons behind home crisis

On the one hand, the number of people in cities is increasing in search of jobs and better life, on the other hand, new houses are not being built according to their needs. Even after the land is available, it takes a long time to get permission to build on it. Government regulations, land use laws, rising construction costs and administrative delays are also slowing the pace of building construction. Apart from this, demand for houses in some cities has increased due to tourism and interest from foreign buyers.

The number of housing shortages may increase

The result has been a wide gap between the demand for housing and its availability. According to the Bank of Spain, there is a shortage of about 7.5 lakh houses in the country and it is estimated that by 2028 this figure could cross one million. Which shows that the problem is getting worse instead of going away on its own.

4 main causes of Spain’s housing crisis:

• Delays in obtaining land and government approval for constructing new houses.
• The demand for houses in big cities and tourist areas is constantly increasing.
• Rising cost of construction materials, land and labour.
• Shortage of rental houses and increasing competition to buy houses for investment.

Getting permission to build a house is not easy

One of the biggest reasons for the housing shortage in Spain is the slow process of building houses. Real estate expert Hernán Bustos has said in his report that the regulations related to land use and construction in Spain are very strict. Various government approvals are required to build a house on any vacant land.

This entire process sometimes takes years. Spain’s competition authority CNMC has also said in its report that land and construction regulations are a major bottleneck in the supply of homes. According to the report, land can account for up to 45 percent of the final price of a home.

This means that along with land becoming expensive, the cost of houses is also increasing due to the delay in getting permission to build on it. A direct effect of this is that builders cannot bring new houses to the market quickly enough. When people want houses and new houses are not ready, the prices of old houses also start to rise.

Demand for houses in big cities is high, supply is low

People’s interest in living in Madrid, Barcelona and Spain’s many seaside cities continues to grow. These cities have more opportunities for employment, business, tourism and better facilities. That is why people from other areas want to come and settle here. Apart from this, Spain is also very popular among foreign tourists.

A large number of tourists come here every year. Many landlords find it more profitable to rent out their houses to tourists for a few days rather than for longer periods. This reduces the number of houses available for the general public to live in for long periods of time. At the same time, foreign investors are also pouring money into Spain’s property market.

Many people buy a house considering it as an investment rather than a residence. This increases the demand for houses in particular cities. However, this crisis is not uniform across Spain. Housing is available in some small towns and rural areas, but housing shortages are felt more in areas where jobs and amenities are available.

Construction costs, government delays added to the difficulty

Land alone is not enough to build a house. This requires cement, iron, labour, engineers and many other things. The increase in their prices has made it expensive for builders to construct new houses. Along with this, delays in government approvals and legal issues related to land further increase the cost of construction.

If a project is planned today, the house may not necessarily be completed next year. According to the report, the impact of the decisions taken today in the land and building construction approval process can be seen in the market after two to three years. This means that even if permission is given to build new houses today, people will not be able to live in them immediately.

The report also said that the price of newly built houses is projected to increase by 7 to 10 percent in 2026. This makes it clear that it will not be easy to overcome the housing shortage without increasing the pace of construction.

Almost all of the youth’s earnings go towards rent.

The housing shortage in Spain is affecting young people and low-income people the most. According to media reports, the average monthly rent in the country is about 1,176 euros, which is about 98.7 percent of the average monthly earnings of a young person in Spain.

If a young man earns every month, almost his entire income goes towards paying house rent. In such a situation it becomes difficult to save money for food, transport, electricity, water and other necessities. Against this problem, the first nationwide general strike took place in Spain on 11 November in 14 years. About 40 lakh workers went on strike with the support of two major labor unions, UGT and CCOO.

Demonstrations took place in several cities, including Madrid and Barcelona. There were also clashes between police and demonstrators in Madrid. According to reports, at least 73 people have been arrested in strike-related incidents across the country. Protesters are demanding that the government impose rent controls, provide protection to tenants in eviction cases and take concrete steps to address the housing shortage.

A huge demand from protesters and unions

1. Ban on rent: There should be a cap on the rental price of houses, so that common people can easily rent a house.
2. Tourist apartments are over: The practice of short-term rental of houses to tourists should be abolished, so that houses are available for local people.
3. Postponement on disposal: Tenants should not be thrown out of their homes without proper security. There should be a system for automatic renewal of rental contracts.
4. Number of Government Houses increased: The government should create a large stock of safe and affordable public housing on a permanent basis.
5. Proceedings on betting on houses: To make a profit in real estate, activities like buying and selling of houses and rising prices should be curbed.
6. 4 to 7% increase in salary: The UGT and CCOO unions demanded a 4-7% wage hike, revision of minimum wages and revision of wages in line with inflation.

Statistics on the homeless in Spain, Report 2022-24

The number of homeless people in Spain is becoming a topic of debate. According to government data, 28,552 people were homeless in the country in 2022. At the same time, in 2024, an average of 33,758 adults per day lived in shelters designed for the homeless. About 77 percent of them were men and 23 percent were women. According to the data, 7277 people were living on the streets and in public places, while 2,709 people were forced to live in cars, tents and other temporary places.