Banco de España's 2025 report: Spain needs 750,000 more homes as first-time buyers now average 47 years old

The Bank of Spain's 2025 Annual Report, published under governor José Luis Escrivá, dedicates a full chapter to what it calls one of the main challenges for the Spanish economy. The document marks a subtle but perceptible shift in tone from the 2023 edition under former governor Pablo Hernández de Cos, particularly on rent controls. Where the earlier report warned that sustained application of price caps could "generate new housing accessibility problems", the 2025 text now says such measures "can generate welfare gains by insuring lower-income households".

A widening gap between households and homes

The core statistic is an accumulated deficit of 750,000 dwellings between 2021 and 2025. Spain created around 240,000 new households last year, but only about 92,000 homes were completed (down 9% year on year). The gap is concentrated in six provinces: Madrid, Barcelona, Alicante, Valencia, Murcia and Málaga account for 52.5% of the shortfall.

If we have a deficit of 750,000, closing it only depends on how much housing supply can grow relative to household creation. If we can boost that it will take less time, but at the current pace of production it will take quite a while because we cannot stop population dynamics.

Demographic strains on homeownership

The age at which Spaniards buy their first home has risen by 5.7 years since 2007, reaching 46.8 on average. Only 22.4% of all home purchases in 2025 involved buyers aged 18-35, down from roughly half before the property bubble burst. The bank attributes this partly to the inability of many young people to save for a deposit and to the delay in leaving the parental home, which now occurs above age 30.

Uneven regional pressure

The report provides granular city-level data. Valencia recorded the steepest real increase in new rental contracts among Spain's six largest cities, at 4.5% annually between 2019 and 2024, while Zaragoza registered a more moderate 1% and Seville just over 0.5%. Purchase prices also diverge: the urban area of Valencia saw a 7.9% annual real gain between 2014 and 2024, against a national average of 4.7%. Zaragoza emerges as the large city that demands the least effort to access housing (24.1% of net income for rent, 5.7 years of income for a first purchase), yet 23.8% of its renting households still spend more than 30% of their income.

Policy response and tourist-flat limits

Reacting to the data, the Ministry of Housing urged tighter restrictions on tourist flats. The Bank's report found that nearly 900,000 dwellings were in non-residential or foreign-owner hands in 2025. Although that is only 3.3% of the total housing stock, the share exceeds 14% in provinces like Alicante and Málaga. The ministry wants to close 111,000 illegal tourist flats identified through a new digital single window and use funds from the 2026-2030 State Housing Plan (7 billion euros) to buy or lease back properties for affordable long-term rental.

Financial stability not yet at risk

Unlike the pre-2008 boom, the Banco de España does not see macro-financial imbalances. Home purchases grew 5.1% in 2025, with a total of over 750,000 transactions, but that represented only 3.8% of households versus an average of 5.5% during 2004-2007. New mortgage lending rose 27.5% in 2025 while the number of mortgages increased 14%, yet lending standards remain stricter than in previous cycles and risks to financial stability appear contained.