The construction of officially subsidized housing (VPO) has awakened after ten years of lethargy, encouraged by European funds, the push of administrations and financing conditions that are more favorable than those of the market after the rate increases of the European Central Bank ( ECB). According to a report by the consulting firm Doubletrade, in the first nine months of the year construction began – handing over the keys usually takes about eighteen months – of 31,243 homes of this type in Spain, 80% more than a year before.
The great rebound has occurred in the Community of Madrid, where activity is now two and a half times higher than a year ago, with 17,960 homes. On the other hand, in Catalonia, which shares the largest accommodation deficit with Madrid, the figure has gone from 2,069 to 2,729. It is an increase of 35%, insufficient to reduce the growing gap between the two main autonomies of Spain. Madrid is building 6.5 times more protected housing than Catalonia.
The rebound, as explained by sources from the Ministry of Transport, Mobility and Urban Agenda, is related to the 1,000 million euros of Next Generation funds distributed in the last two years among the autonomous communities to build 20,000 protected homes.
Added to this is a change in the financial scenario. “The increase in the cost of financing has slowed down free housing, which is affected, but officially protected housing has an appraised price and loans with the help of the Administration,” explains the president of the National Construction Confederation ( CNC), Pedro Fernández Alén.
Builders attribute Madrid's greater speed to the fact that the appraisal of land and the updating of maximum sales prices have arrived earlier. “Provided housing is going to be an important part of our activity and there is interest from companies,” indicate sources from the sector.
Doubletrade data breaks decade-long drought. A recent report by the Pompeu Fabra University, in this case with officially protected housing delivered in Spain, gives an account of what happened: if in 1996 the rate was more than 80,000 a year, in 2008 it still exceeded 60,000, until in 2012 the figure went from 45,000 to almost zero four years later.
Sareb explains that at the end of this year the first seven lots of the Vienna Project will be put out to tender for the construction of affordable rental homes throughout Spain. The land to launch a first batch of 3,500 homes has already been identified with the help of PwC, with the aim of gradually removing land to reach between 12,000 and 15,000 homes.
Sareb has already contacted interested investors, to whom it will transfer the land for a period of between 65 and 80 years so that they can build the homes and exploit them for rent. Investors will be able to benefit from EIB financing and the Next Generation program addendum.
For builders, there is an opportunity to compensate for the slowdown in free housing. The public tender until August is around 19,000 million and increases 7.5% compared to the same period in 2022, according to the Seopan construction companies association.
The Government has announced a plan to build 184,000 affordable rental homes and has approved a 4 billion loan line to promote the development of 43,000. It is signing agreements with autonomous communities, including a recent one with the Generalitat and several Catalan municipalities to build 761 homes.
Madrid has in its favor large urban plans such as Madrid Nuevo Norte, where 10,500 homes will be built, 20% of them protected.
The restart of official protection works has to do with a “government bet,” says Doubletrade. “The objective is to unblock demand by increasing supply at affordable prices so that the sector gets back on track,” says its general director in Spain, Xavier Piccinini.
