Spain’s Prime Minister Pedro Sánchez on Monday presented a new public investment fund that he said would raise €120 billion and help tackle the country’s persistent housing crisis, although similar announcements have previously not met expectations.
Scarce and unaffordable housing is consistently a top concern for Spaniards and represents a stubborn challenge in one of the world’s most dynamic developed economies.
The new “Spain Grows” fund, first announced in January, aims to replace the tens of billions of EU post-Covid recovery aid that helped drive Spain’s strong growth in recent years.
Sánchez said the headline figure – representing seven percent of Spain’s annual economic output – would come through public and private sources, with an initial contribution of €10.5 billion of EU money.
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The fund would “mobilise up to €23 billion in public and private funding to dynamize the housing supply” and help build 15,000 homes per year, Sánchez added, without specifying a timeframe for the planned investment.
Energy, digitalisation, artificial intelligence and security industries would also benefit from the money, the Socialist leader said at a presentation in Madrid.
Tourism is a key component of Spain’s economy, with the country welcoming a record 97 million foreign visitors last year, when GDP growth reached 2.8 percent — almost double the eurozone average.
But locals complain that short-term tourist accommodation has driven up housing prices and dried up supply.
READ ALSO: The overlooked factors causing Spain’s housing crisis
The average price of a square metre for rent has doubled in 10 years, according to online real estate portal Idealista.
According to the Bank of Spain, the net creation of new households and a lag in housing construction created a deficit of 700,000 homes between 2021 and 2025.
READ ALSO: ‘Red tape takes longer than building homes in Spain’
Over the past years, the Spanish premier has made similar announcements of multi-billion-euro plans that would fast-track the building of tens of thousands of homes per year, but the general consensus among industry experts is that they haven’t materialised at the rate promised.
According to Spain’s Ministry of Housing and Urban Agenda, in 2024 more than 100,000 new homes were completed, representing an increase of 13.1 percent compared to the previous year.
With additional reporting by Alex Dunham, The Local Spain’s Editor
