Housing prices in Spain continue to rise. According to notaries, the average price per square meter increased by 5% in February 2025 alone. Why is this happening?
Manuel Balcells, CEO of Inbisa —one of Spain’s largest construction companies—reveals the main reasons.
Prices and Taxes
- Construction costs have surged due to increased taxes and fees. For example, in Inbisa’s current projects, municipal licenses and permits alone add €6,000 to the cost of each apartment.
- “The solution is simple: if the government cuts taxes, housing prices will fall,” Balcells emphasizes.
Supply Shortage
Demand is concentrated in cities like Madrid, Barcelona, and the Basque Country, worsening the imbalance. Access to housing is especially critical in the Basque Country.
Delays in obtaining permits (6–18 months) and bureaucratic hurdles inflate project timelines and costs.
Labor crisis in construction
A shortage of workers and rising wages drive up expenses.
“The future lies in industrialization: modular construction will reduce reliance on manual labor,” notes Balcells.
Recommendations for the government
- Reduce the tax burden: Eliminate some fees during construction and transactions.
- Streamline bureaucratic procedures: Shorten approval timelines.
- Boost the rental market instead of social housing: *“Renting must become an affordable alternative, especially for young people.”
Inbisa’s Position: Plans and Forecasts
The company delivered fewer than 100 apartments in 2024 but maintains an average annual pace of 300 units.
2025 Goals:
- Launch projects worth €170–180 million.
- Deliver 200 apartments in two new residential complexes (RC).
- Key projects are focused in Madrid, Barcelona, and the Basque Country.
“We prioritize residential real estate, where demand is highest. The logistics sector remains secondary for now,”* Balcells concludes.
Rising housing prices in Spain are a systemic issue requiring collaboration between businesses and authorities. Tax cuts, bureaucratic reform, and innovation in construction could drive change.