Real estate wealth in Spain has reached historic levels. Data from the Bank of Spain reveals that the value of homes owned by Spanish families has surpassed €7 trillion, an unprecedented milestone since 1980, when records began. In the last year, residential assets have grown by 12.2%. And if we look at the trend since 2013, when the sector bottomed out after the crisis, the increase exceeds 70%.
Currently, this volume represents 680% of households' annual disposable income and is almost five times the national GDP (€1.5 trillion). This figure also far exceeds the stock market capitalization of Spanish companies and public debt. In other words, the weight of the real estate sector in Spanish wealth is overwhelming, consolidating the historical trend of preferring home ownership over other financial assets.
Traditionally, gross real estate assets represent about two-thirds of total household wealth, although now, due to rising prices, they are close to three-quarters. The increase in the housing stock (which will exceed 27 million properties in 2024) has been significant, but the key remains price appreciation. The combination of scarce supply and high demand, driven by employment and still-competitive interest rates, explains why both real estate assets and prices are evolving practically in lockstep.
However, analysts warn: this growth rate is unlikely to continue indefinitely. Forecasts point to further increases in the short term, but the market will tend to stabilize and, probably, moderate around 2026.
It is worth emphasizing that the market value and the real value of real estate assets do not always coincide. The current amount is heavily influenced by speculation and pressure on land, especially in areas of high demand. In many cases, the cost of land represents up to three-quarters of the total price of the home, which distorts the real value compared to the construction cost.
On the other hand, the fact that nearly 75% of household wealth is concentrated in the real estate sector means they are less exposed to the volatility of other markets, such as equities or cryptocurrencies. Even so, it is surprising that some recent regulatory measures, such as rental price caps or eviction moratoriums, go against the interests of homeowners. In a context like the current one, it would be more effective to invest in broad state agreements and agreed-upon policies, rather than regulations that generate uncertainty in the sector.
Let's get to the point. It is absurd to put obstacles in the way of those with the most capital. If more investors invest in the real estate sector, the supply in the rental market will grow, and with it, some moderation in prices can be expected. The housing problem in Spain right now is clearly a matter of supply: there is a shortage of around one million homes, and, frankly, measures to address it are conspicuous by their absence. It's a critical situation, almost a national emergency.
Reality demands that the main parties, especially the PSOE and PP, put aside short-termism and work together on a consensual, sustainable, and long-term housing policy. Housing is a basic necessity. And with a rising population, partly due to immigration, the imbalance between supply and demand can only translate into higher prices, regardless of the regulations or limits implemented. In any free market, if demand soars and supply stagnates, prices skyrocket, period.
Added to this is the fact that Spain barely has any social housing: less than 3% of the total housing stock, while countries like the Netherlands have around 30%. The contrast is stark and contributes to exacerbating the problem.
As if that weren't enough, the average salary in Spain is significantly lower than in other European countries, and the arrival of international investment funds makes it even more difficult to access housing, especially in so-called stressed areas.
The only realistic way to stem rising prices is to increase supply, but this isn't an immediate solution. We're talking about a long-term project, lasting at least a decade. That's why a serious State Pact on housing—a minimum of two legislative terms—and the firm commitment of all administrations (state, regional, and local) are urgently needed. The problem, unfortunately, is that today, such a level of agreement seems unattainable.