Housing: construction costs soar to €2,000 per square metre in Spain

Construction now costs €2,000/m²: housing won't get cheaper on its own

An 80-square-metre apartment, which works out at 54 square metres of usable space, starts at around €160,000 in construction costs alone. On top of that come land, taxes and the developer's margin. The result is a home that a young person earning €1,500 a month cannot afford even with a forty-year mortgage. The conclusion, repeated in different tones throughout the conversation, is that the problem is not just restricted supply: it's about distribution, regulation and a market that has been heavily regulated for years.

From the bubble to €2,000 per square metre

During the boom years, homes were built at around €500 per square metre. Today the figure is around €2,000. This is not a rough guess: it's the order of magnitude used by those who work on construction sites. That jump — quadrupling the cost of building — explains why prices cannot fall without someone losing money. During the bubble, more homes were built than in several countries combined, but not because of demand: they were built because banks were lending and because an off-plan apartment could be sold three or four times before completion. When the bubble burst, millions of homes flooded the market and prices fell. Today there is no such stock. And without stock, the price is what it is.

There's no shortage of land; there's a shortage of management

Spain doesn't have a land problem. It has a management problem. Some argue that developable land is being withheld by town councils and regional governments that prefer to keep it scarce to sustain municipal revenues through permits and capital gains taxes. The cases of planning corruption that are cited — houses in the middle of the countryside with water, electricity and sewage thanks to who knows what favour — are not anecdotes: they are proof that the system runs on contacts, not rules. The result is a market where land becomes the bottleneck nobody wants to release.

Immigration and demand: the elephant in the room

Part of the conversation attributes the rise in demand to the arrival of foreign population. The figures being cited suggest that demographic pressure on housing has grown in recent years, and that without that inflow the market would be less strained. Others counter that the problem is older and structural: without immigration, the lack of affordable housing would still exist because the ownership model and land use remain just as rigid. What nobody disputes is that demand has risen and supply has not.

The generational divide: grandparents with three flats, young people who can't afford a car

One fact hovers over the whole discussion: people over sixty accumulate properties while those under thirty can't even afford the deposit on a mortgage. It's not a question of life stages, it's maths. On a €1,500 salary with rent eating up half of it, saving is a fantasy. The proposal that older people should invest in businesses instead of property sounds reasonable on paper, but it clashes with the reality of a country where property has been the favourite haven for savings for decades. Meanwhile, the young person pays the rent of someone whose flat is already paid off.

Modular housing: solution or a business for the few?

Industrialised construction is starting to be mentioned as an alternative. Mass-produced modules assembled in a matter of weeks. Some warn that the price of a module will not be much lower than traditional building, and that the business will be shared out among the same old companies. The promise of cutting costs clashes with the reality of a market where land remains the decisive factor. Without cheap land, even the cheapest module is still expensive.

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The conclusion to be drawn from all this is uncomfortable: there is no single measure that will fix the problem. Not freeing up land, not cutting taxes, not building faster. Housing prices are the sum of construction costs that have multiplied, withheld land, growing demand and a generational divide that nobody wants to touch. And meanwhile, the young keep window-shopping.