Sánchez halts evictions, but regarding the housing crisis, the IMF and the Bank of Spain say we need to build more homes

According to figures released yesterday by Eurostat, in the second quarter of 2026 house prices in the EU rose by 4.7 per cent year-on-year and rents by 3 per cent. But it is in Spain that the housing crisis has sparked mass protests. Following the eviction of 87-year-old Maricarmen Abascal from the home where she had lived for seventy years, tens of thousands of people took to the streets, with a left-wing movement that is both a force for struggle and a governing force. Consequently, on 29 September, Pedro Sánchez’s government responded with the ‘Maricarmen Decree’, which suspends evictions of vulnerable people without alternative accommodation until 2030. However, in the preamble to the decree, the Sánchez government states, citing the Bank of Spain (BdS), that the country needs 750,000 new homes (according to Deputy Governor Soledad Núñez, the shortfall could exceed one million by 2028). And just like the Affordable Housing Act presented in September by the European Commission, the Maricarmen Decree (which also provides for a fund to finance housing projects) focuses more on existing homes than on those that are lacking, and therefore does not address the heart of the problem.

In its latest annual report, published on 18 June, the Bank of Spain identified a shortage of supply as the main factor behind difficulties in accessing housing. Figures compiled by El País help to illustrate the scale of the crisis: between 2015 and 2025, buying a home in Spain became 80 per cent more expensive, whilst renting rose by 87 per cent, whilst nominal wages increased by around 30 per cent (with cumulative inflation of 27 per cent over ten years). In 2025, 69 per cent of Spaniards aged between 18 and 34 were living with their parents, compared with 52 per cent in 2010 (today the European average is around 50 per cent). Since 2015, demand for housing has risen significantly following a population increase of over 3 million residents, mainly due to immigration (with the provinces of Madrid and Barcelona accounting for 43 per cent of the increase). To this have been added tourism and purchases by non-residents (accounting for around 8 per cent of property transactions, totalling over 500,000 homes over the ten-year period).

However, this significant increase in demand was not matched by a parallel and proportional increase in supply: in Spain in 2025, just 90,000 homes were completed, whereas in the 1990s – that is, before the property bubble of the 2000s – an average of around 250,000 were built each year.

Also in its annual report, the Bank of Spain emphasises that the rise in prices is caused by a lack of response from the supply side to growing demand. According to the Central Bank, there is a shortage of already developed building land in areas where demand is growing, town planning is slow and, despite immigration, construction firms are unable to find skilled workers: by the end of 2025, 63 per cent of Spanish construction firms cited labour as a constraint. In May, the International Monetary Fund (IMF) advised the Spanish government to speed up urban development, simplify planning permissions and reduce legal uncertainty. But that is not all. IMF experts also advised the Spanish government not to renew the rent cap, unless a new in-depth assessment contradicts their findings that rent caps have reduced the number of properties available for rent on the market. Yet the ‘Maricarmen’ decree, before Parliament today – where the government is not certain of securing a majority – goes in the opposite direction: it extends contracts due to expire by 2028 by up to two years and caps rent increases at 2 per cent (barring exceptions) until the end of 2027. In short, these are not exactly the solutions recommended to tackle the housing crisis.

In Italy, the Meloni government is moving in the opposite direction with a bill that reduces the maximum period granted by a judge to a tenant in arrears to vacate the property from 60 to 30 days. In the lettings sector, legal certainty and speed are crucial: a landlord is more willing to rent out a property if they know they can recover it when the tenant stops paying. However, Marco Grimaldi of AVS describes the Spanish decree as “a powerful signal for the whole of Europe”. He has therefore proposed a ban on evictions for rent arrears through no fault of the tenant and the ‘temporary expropriation’ of empty properties owned by large property funds. It is a pity that, between expropriation and the ban on evictions, no consideration is given to the risk of exacerbating the cause of the housing crisis: the shortage of homes on the market.