MORTGAGES in Spain are experiencing an historic boom as fears of looming housing shortages drive a market frenzy unmatched in 16 years.
In October alone, more than 52,000 mortgage contracts were signed in Spain – despite a 10% rise in loan costs compared with the same period last year, according to Spain’s National Statistics Institute (INE).
The staggering figure is the highest since September 2010, data has shown.
Experts have linked the surge to growing concerns that housing demand would far outstrip supply in the near future.
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Ricardo Gulias, a housing expert and chief executive of RN Tu Solucion Hipotecaria, told El Español: “We are seeing double-digit increases due to strong demand and limited supply. Buyers are willing to pay more in order not to lose a property, and that is clearly pushing prices up.”
According to the INE, new mortgage holders in Spain borrowed nearly €9 million in October – an increase of 11% compared with the same month in 2024.
This is due to rising loan costs, experts have said, but also fears that buying property may soon become more difficult and expensive than ever.
Earlier this year, a Bank of Spain report warned that the construction of new housing was not keeping pace with the growing number of households.
While around 180,000 new homes were built in the past two years, roughly 240,000 new households were created in the same period, the report said.
The Bank of Spain stressed that the alarming trend could result in a shortfall of around 600,000 homes nationwide by the end of 2025 – insisting the phenomenon stems not only from slow rates of construction, but also a lack of buildable land and skilled labour.
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This supply-demand mismatch is already fuelling higher property prices, both for purchase and rental markets, as buyers rush to secure homes before conditions worsen.
But while 2025 is on track to see more than 500,000 mortgages signed nationwide, experts caution that the market may face a slowdown in 2026 – as prices continue to spiral upwards.
Raul Garcia Molina, of Ysabika Servicios Inmobiliarios, confirmed that a viable solution would be to mark more land for housing development.
He said: “It does not matter whether it is public housing or private venture. If we free up land to build on and try to meet rising demand, prices will begin to drop,” he said.
Earlier this year, PM Pedro Sanchez’s government set up a new public housing company in a bid to relieve some of the pressure.
The company has been tasked with building affordable social housing across Spain, and is currently managing around 13,000 properties nationwide – with 17,000 more expected to fall under its remit in the coming years.
Sanchez has also announced a new 2026 government programme aimed at boosting housing subsidies for young people, older tenants, and families with children.
In May this year, the PM ordered AirBnB to take down more than 60,000 of its listings across Spain as tensions erupted over the growing number of holiday rentals in some of the country’s major cities – including Madrid.
Last month, left-wing Esquerra Republicana de Catalunya (ERC) proposed a bill to introduce a progressive tax increase on owners of three or more properties – but Parliament voted it down.
During an address in the lower house of Parliament, ERC spokesperson Gabriel Rufian stressed that housing was “the country’s main problem.”
He added: “It now takes up to 59 years of wages to afford a 60-square-metre flat. If bread had risen as much as housing, we would now be talking about a loaf costing around €13.”
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