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RENTING

Spain needs to build 1.2 million affordable rental homes in a decade

The current shortage of housing in some areas of Spain means that 761,000 affordable rental properties and 442,000 social housing units need to be built in the next 10 years to meet demand, a new study has warned.

Published: 25 October 2023 13:24 CEST
Spain needs to build 1.2 million affordable rental homes in a decade
Construction of more homes is needed to meet demand in Spain. Photo: CESAR MANSO / AFP

According to a new report by real estate developer Culmia in conjunction with social research and consulting firm Gad3, around 761,000 new well-priced rental properties will be needed over the next decade to meet demand in Spain, plus an additional 442,000 social housing units.

The report specifies that this will be needed to satisfy demand, relax current market prices, and reduce the amount that households currently allocate to rent, which is currently on average 40 percent of their income.

The investment required to undertake these new developments stands at €108 billion (approximately €142,000 per home), of which 76 percent would come from private investment and only 24 percent from the public sector.

By region, Catalonia, Madrid, Andalusia and Valencia are the ones that require the most affordable housing and are also among the most populated.

Catalonia is the region that will need the most housing to meet demand, with a total of 225,000 reasonably priced rental homes in the next ten years. This will require a public investment of €1.01 billion, according to the report, due to the fact that private investment there is higher. 

READ ALSO: Why there are half a million new homes in Spain that no one wants to buy

This is much less than what is needed in the region of Madrid, despite the fact that it will cost the capital region more. According to the report, the Madrid region needs 174,000 new affordable rental homes in the next decade, with a public investment that will reach €5.4 billion.

Andalusia is another region that requires more affordable rental housing. The 85,000 new units needed there will require an investment of €4.5 billion.

Valencia follows, also with 85,000 homes needed and an investment of €3.2 billion. Finally, the Canary Islands will need 46,000 homes with an investment of €2.4 billion.

Housing production in Spain has fallen by 86 percent compared to its highest rate in 2006. Around 80,000 homes are built per year and the national market is near the bottom of Europe in terms of public housing construction.

Of the total housing production, only 10 percent corresponds to protected housing and of that percentage, the majority (80 percent) comes solely from private investment.

READ ALSO: How Spain plans to address its huge lack of social housing

The report shows that if the same investment was given by the government, public and private collaboration would increase the production of public housing by 72 percent, going from 442,000 affordable homes to 761,000.

The creation of 150,000 new homes per year is expected in the most populated municipalities of the country, meaning that every year there will be a deficit of 20,000 affordable homes in certain areas. 

According to the report entitled ‘Access to Housing and Affordable Rental Needs’, those households with salaries between €1,000 and €2,000 per month are those that have the highest degree of vulnerability, with a disproportionate amount of their salary going to rent –  50 percent in some cases. It is this group that will be the main beneficiaries of these new affordable homes.

The lack of 1.2 million rental properties does seem high, and Culmia does have vested interests in such a gargantuan task as one of the main developers in social housing in the country, but similar studies such as that conducted by Atlas Real Estate Analytics in 2023 put the figure needed as even higher: 1.83 million units.

One of the main paradoxes is that Spain does have many empty properties, but they are not located in the provinces that need them.

For example, in the provinces of Ourense, Ferrol, and Ponferrada in Galicia and Ciudad Real in Castilla-La Mancha, in addition to their surroundings, there is actually a surplus of houses.

READ ALSO: What are Spain’s plans to charge owners of empty homes more tax?

A report by UVE Valoraciones, a society associated with the Bank of Spain, states that there are 433,000 empty houses in Spain, but there are 13 provinces in the country that have a shortage of properties.

“Lack of housing is not a national problem, it is a problem in certain areas,” says Germán Pérez Barrio, president of the appraiser who authored the UVE report.

READ ALSO – Renting in Spain: Why it’s become very hard to find a flat to share

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VISAS

Spain’s soon-to-end golden visa: Can I still apply and what if I have it already?

Last April, Spain's government said it intends to axe its property-based golden visa scheme, but is it too late still apply, how long does it take and what happens if you have the visa already? The Local spoke to an immigration lawyer to find out.

Published: 17 May 2024 12:25 CEST
Spain's soon-to-end golden visa: Can I still apply and what if I have it already?

The golden visa programme, also known as the visado de residencia para inversores in Spanish, grants non-EU nationals residency in Spain when they buy a property in Spain worth €500,000. 

It can also be obtained by investing €1 million in shares in Spanish companies, or €2 million in government bonds, or having transferred €1 million to a Spanish bank account. 

In early April, Prime Minister Pedro Sánchez announced he was axing the property-based golden visa, although there’s no new law in place yet.

READ MORE: What the end of Spain’s golden visa means for foreigners

More recently the government’s junior coalition party Sumar had said that they have now filed an official bill in the hope they can scrap it as soon as possible.

Sumar spokesperson Íñigo Errejón told journalists that the visas are a privilege that must be scrapped “immediately” because they have an inflationary effect on the housing market.

All of this means that those still interested in still getting the visa are confused. They don’t know when the scheme will end, if they still have time to send in applications and what will happen to those who are already in the process of applying.

In order to help answer some of these pressing questions, The Local Spain contacted María Luisa De Castro from CostaLuz Lawyers in to find out more. 

Q: When will the Golden Visa scheme officially end?

A: “The exact date for the official end of the Golden Visa scheme has not been fully detailed yet. Initially, changes would be implemented in the near future, potentially within the next few months. Some optimists believe it might be a bluff by the government and that it may not be implemented after all.”

READ MORE: When will Spain’s golden visa scheme officially end?

Q: Has the process of applying changed?

A: “As of now, the process remains unchanged, so it’s exactly the same as before.”

Q: Can people still apply for now?

A: “Applications are still being accepted. However, given the recent announcement, it is advisable for prospective applicants to act swiftly.”

Q: What will happen if I’m in the middle of the application process?

A: “For those currently in the middle of the application process, their applications will still be processed under the existing rules. Once the new regulations come into effect, it will very likely come with some transitional provisions to handle ongoing applications.”

Q: What about those who want to invest instead of buy a property?

A: “The visa remains available for other investment options such as investments in companies, public debt, etc.”

Q: What if I already have the golden visa through property investment, will I be able to renew it in the future?

A: “Our opinion (and that is what we will defend) is that renewal rights are acquired when the visa is granted and therefore cannot be subsequently reduced, as this would constitute a retroactive limitation of individual rights. The Spanish Constitution prohibits retroactive application of laws that are not favourable or that restrict individual rights once they have been acquired.”

Q: How quickly can I get the golden visa?

A: This depends on where you apply from. According to the CostaLuz Lawyers, if you’re applying outside the country “You should apply at least 90 days before you plan to travel to Spain”. If you’re inside Spain, you can apply through the Unidad de Grandes Empresas. This could take anywhere between 20 and 60 days.

CostaLuz Lawyers argue that it’s not necessary to wait until the property purchase has gone through, that you can apply with your initial contract or a statement from your bank in Spain, certifying that you have deposited at least €500,000.

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