In a momentous address delivered on January 13, 2025, Spanish Prime Minister Pedro Sánchez laid out an ambitious set of housing policies designed to combat soaring property prices and ease access to affordable housing.

Accompanied by Housing Minister Isabel Rodríguez, Sánchez's announcement was a key moment in Spain's ongoing struggle to address a growing housing crisis.

Speaking at a housing forum, Sánchez opened his remarks by highlighting the staggering increase in property costs, noting a 48% rise in average housing prices across Europe over the past decade.

This surge, he stated, has compounded challenges for young people aspiring to independence and has placed immense financial strain on many Spaniards.

Among the key proposals was the introduction of a new public enterprise dedicated to enhancing public housing availability.

This initiative aims to ensure consistently affordable options, starting with the construction of over 400 homes in the Valencian Community.

Sánchez detailed plans for the government to transfer 2 million square meters for these projects, resolving to incorporate 13,000 homes from Spain's asset management company for the banking sector, known colloquially as the 'bad bank'.

Addressing concerns about foreign investment in the housing market, Sánchez announced measures to limit property purchases by non-EU foreign residents, asserting that the acquisition of 27,000 homes by such buyers last year is unacceptable.

He emphasized that homes should not merely serve as financial assets.

In a bid to modernize the housing sector, the government also intends to establish a housing-focused Strategic Project for Economic Recovery and Transformation (PERTE).

Allocating resources for the construction of 25,000 new homes, the initiative will be based in Valencia, aiding the region's recovery following recent natural disasters.

The Prime Minister criticized the opposing Popular Party (PP), accusing them of wanting to recreate the conditions of the previous housing bubble while leaving taxpayers to deal with the fallout.

He underscored his administration's commitment to housing reform over the past seven years, highlighting efforts such as the suspension of evictions and the elimination of the 'golden visa' program.

Additional proposals include introducing reforms to classify short-term rental properties, like Airbnb, as business operations for tax purposes, and adjusting the tax benefits associated with real estate investment trusts (Socimis) to favor social housing development.

Sánchez's proposals have sparked debate within Spanish politics.

Notably, opposition leader Alberto Núñez Feijóo of the PP has called for a reduction in VAT on new housing models, suggesting it should be decreased from 10% to 4%.

As Spain grapples with a significant housing supply deficit, producing merely 90,000 new homes annually compared to the 600,000 built during the height of the previous boom, the government's housing strategy represents a critical juncture in addressing one of Spain’s most pressing socio-economic issues.