Search
New building permits for residential construction in Spain have continued to grow in recent years, showing a positive trend in the construction sector. According to the latest data from the Ministry of Housing and Urban Agenda, building permits for new homes reached over 90,000 units between January and August 2025, representing a 7.6 % increase compared with the same period in 2024. Most of this growth has been driven by multi-unit housing projects in urban and metropolitan areas.
Despite this growth in permits, housing supply in Spain still lags far behind demand. Analysts point to structural factors — such as rising construction costs, administrative slowdowns, limited availability of land, and labor shortages — that continue to constrain the pace of new housing development. Even though the construction sector shows momentum, the current rate of new builds is insufficient to close the long-standing housing gap.
A recent property market report highlights that while more than 130,000 new homes were approved in the 12 months to May 2025, this increase fails to match the level of demand created by demographic growth, rising household formation, and increased purchasing power. As a result, the accumulated deficit of housing continues to widen.
This imbalance between supply and demand has significant consequences for affordability. Reports indicate that Spain’s housing market has experienced double-digit price growth, largely driven by insufficient new construction relative to demand — contributing to higher sale prices and rents, particularly in cities like Madrid, Barcelona, Valencia, and Málaga.
Experts and housing advocates argue that policy reforms and accelerated building processes are urgently needed to help bridge this gap. Without substantial increases in the pace of new home construction and measures to improve housing affordability, the shortage is expected to continue putting upward pressure on prices and tightening available inventory in key urban markets.
