• According to the first study on “Access to Housing and the Need for Affordable Rentals” presented by Culmia, the national market requires 76,000 affordable housing units per year, given that 76% of rental households in Spain are currently under strain.
• Catalonia, Madrid, Andalusia, and the Valencian Community will account for the bulk of investment needs, with more than 60% of the total.
• Spain now ranks fifth among the countries with the smallest public housing stock in the entire European Union.
Culmia, a real estate platform that brings together all housing solutions on the market, has released its first report on “Access to Housing and the Need for Affordable Rentals, ” in which, in collaboration with GAD3, it analyzed the housing cost burden of households in Spain’s 151 most populous municipalities, as well as trends in rental market prices and demand compared to neighboring countries. Among the main conclusions, the report indicates that 761,000 new affordable rental units would need to be built over the next 10 years to meet demand, ease current market prices, and reduce the proportion of household income spent on rent, on which they currently spend an average of 40% of their income.
The projected investment to undertake these new developments stands at 108,000 million euros (142,000 euros per home), of which 76% would come from private investment and only 24% from the public sector. Specifically, a total of 81.5 billion would come from private investment, divided between 18.5 billion from the contractors and 63.0 billion from bank financing. Public investment, for its part, would total 26.6 billion, to be allocated between construction aid and financing subsidies.
By region, Catalonia, Madrid, Andalusia, and the Valencian Community are the areas with the greatest need for affordable housing development, although the required investment varies fr
. Catalonia will need to build 225,000 affordable rental units over the next ten years, which will require a public investment of 1,010 million euros. The latest update to the housing module prices means that Catalonia’s investment requirement is lower than that of the Community of Madrid, even though the number of homes needed is higher. According to the report, the Madrid region needs 174,000 new affordable rental units over the next decade, requiring public investment of 5,418 million euros.
Andalusia is another region that needs more affordable rental housing, with a total of 85,000 new units and an investment of 4,529 million. It is followed by the Valencian Community with 85,000 homes and 3,245 million. Finally, the Canary Islands, with 46,000 units and 2,486 million.
Accordingto Francisco Pérez, CEO of Culmia,“Spain needs clear and efficient policies to develop, through public-private partnerships, a stock of affordable housing capable of meeting both immediate and future demand. We face the challenge of structuring a model that is poised to be one of the main solutions to the housing market and implementing it so that it becomes a reality through well-organized tenders, proper urban planning, and attractive financing.”
Low production and rising demand
In a context where housing production in Spain has fallen by 86% from its all-time high in 2006 (80,000 homes are built annually), the national market ranks at the bottom of Europe in terms of public housing construction, and is now the fifth country in the entire European Union with the smallest stock of public housing. Of total housing production, only 10% consists of affordable housing, and of that percentage, the majority (80%)
comes solely from private investment. The report’s data show that, given the same level of investment by the government (26,000 million over ten years), public-private partnerships would increase public housing production by 72%, rising from 442,000 units to 761,000 units that could be developed with the contribution of private investment.
In Spain, 150,000 new households are expected to be created each year in the most populous municipalities; therefore, if the current trend in housing development continues, there will be a shortfall of 20,000 affordable homes each year.
As explained in the report “Access to Housing and the Need for Affordable Rent,” when the housing cost burden rate is analyzed by income group, households with incomes between 1,000 and 2,000 euros are currently the most vulnerable, with a disproportionately high housing cost burden exceeding 50% in some cases. It is precisely this group (41% of rental households) that is the primary target of this new affordable rental program.
The report prepared by Culmia also examines the housing needs and options for population groups with incomes below 1,000 euros and those with incomes above 3,000 euros. For the first group, it estimates that 442,000 units of public rental housing (social housing), and for the second group, a subsidy program aimed at facilitating the transition to the homebuyer market through down-payment guarantees or tax breaks, which would affect 486,000 units over the next ten years.
You can check the Read the full report via this link.
