Housing and migration: the factor entering the equation

Housing and migration: the factor entering the equation

How much blame does the mass arrival of people deserve for the price of housing? In Spain, some are convinced that everything else is smoke and mirrors: without homes for everyone and without hands to build them, any discussion about renting falls short. Some point to a sustained pace of arrivals since the pandemic and a demand pressure that was not in the manuals. But the "multifactorial" label hides a problem: several real causes competing at the same time.

How many people are arriving and why it matters

Some argue that the real number of arrivals has been underestimated for years. A calculation circulating in these circles puts the flow at half a million per year since the pandemic, and more than a million over the last three years for the country as a whole. Others count it through the labour market: Spain would have reached a record of nearly 24 million social security contributors, with a large share of new contracts signed by recent arrivals.

The argument has market logic: if demand grows faster than supply, prices rise. And supply is late by definition, because building takes time. The question is whether that gap is enough to explain what has been seen in the recent price increases.

Is immigration the sole cause of the rise or just one piece?

This is where the board splits. One camp holds that speculation is a consequence, not a cause: when a flat goes from taking months to sell to being snapped up in a week at double the price, it is because huge numbers of people are competing for the same product. The analogy used is the game of musical chairs.

Opposing them, another group downplays the weight of migration: not everyone who arrives is looking for their own flat, many make do with a shared room, and the impact gets diluted among the other factors. In between come foreign buyers, tourist rentals and owners who accumulate properties.

Official passivity also takes its toll. Blame is directed at municipal bureaucracy, the lack of released land, the shortage of public works and legislation that, according to several voices, makes every brick more expensive before it is even laid.

No workers, no cranes: the construction bottleneck

Even if all the land in Spain were rezoned, there would not be enough people to build on it. As one participant sums it up, the equation does not add up: a rent of 1,500 euros against a salary of 1,200. Nobody accepts hard, poorly paid work if the rent swallows the entire wage. And without workers, there are no new developments.

That is the double trap that leaves the issue with no apparent way out: building is needed to bring prices down, and there is neither the workforce nor the margin to pay for it.

Mortgages add another layer. Some point out that the banks have already turned off the tap: without some 50,000 or 60,000 euros for a down payment, the door to buying is closed, and someone earning around a thousand a month is shut out of both renting and a mortgage.

The tourism that eats up the rental market

A recurring topic is short-term and seasonal rentals. The phenomenon did not start with the pandemic: it had been growing for years, but it accelerates when a landlord prefers to evict a long-standing tenant to make room for a visitor with a plane ticket. Regulating it is raised as a cross-cutting demand, although it clashes with private property.

The problem remains unresolved. And with each passing month, the list of candidates per home grows a little longer.