Spain’s housing market is stretched thin. Mario Conde says prefabricated homes are the only way to quickly boost supply and make homes affordable again.
Spain’s housing shortage is no secret. Mario Conde, once at the helm of Banesto, doesn’t sugarcoat the problem. He says the country faces a “particularly bad” situation. The reason is simple. Spain’s population has jumped by nearly 10 million, but new homes haven’t kept up. Prices have soared. For many, owning a home now feels out of reach.
Conde lays out the numbers. Spain’s population climbed from about 40 million to almost 50 million. The housing stock barely moved. “If there is exponentially increased demand for housing, and no corresponding increase in supply, prices go up,” he said. Buyers can’t afford what’s on offer. Banks hesitate to lend to people who can’t realistically pay back. The Bank of Spain reports a gap of roughly 750,000 homes between new households and new builds from 2021 to 2025. The main reasons: not enough land ready to build, slow urban planning, and too few skilled workers.
In 2025, only about 90,000 new homes were built in Spain, compared to an average of 250,000 per year in the 1990s.
Renting isn’t much easier. Conde points to three main drivers of rising rents. Demand far outstrips available flats. Landlords want higher yields as property values rise. Tourist rentals are booming. He admits short-term lets help Spain’s tourism sector. But they pull homes out of the long-term rental pool. That leaves regular residents squeezed. Idealista data shows rents in Spain jumped 8.5% in 2025. In Madrid, the rise was 9.7%. The average asking price hit 23.30 euros per square meter in Madrid, 20.20 in Barcelona, and 19.30 in Palma.
Conde says talk is cheap. He wants the state to lead public housing projects. He also wants private developers to get support, not blame. His sharpest idea: build prefabricated homes. These can go up in six months. Traditional homes take three times as long. He says this is the only way to quickly add supply and cool the market. But even prefab faces hurdles. The Bank of Spain and independent reviews point to the same old problems—land shortages, slow permits, and not enough workers. Fixing the crisis will take more than one solution.
Spain has one of the smallest stocks of social housing in Europe, with only about 1.7% of its housing classified as social, significantly limiting the government’s ability to ease the crisis through affordable rentals.
Spain isn’t alone in this struggle. As reported earlier, even big landlords in Madrid are feeling the pinch. Mortgage costs are up. Rents aren’t keeping pace. The real pressure comes from three places: more people, not enough new homes, and the lure of tourist money. Both tenants and owners are caught in the squeeze. The worst shortages hit fast-growing regions—Madrid, Barcelona, Alicante, Valencia, Murcia, and Malaga. National averages hide just how bad things are in these cities and tourist hotspots, according to several top economic sources.
Conde’s message cuts through the noise. He says Spain must act now. More homes, built faster and cheaper, are the only way out. Prefabricated homes aren’t a cure-all. But in a market where time and money are tight, they offer a real shot at change. The question is whether leaders will move before the gap gets too wide to close. The Bank of Spain’s deputy governor warns that if nothing changes, the housing deficit could top 1 million homes by 2028.
