Access to affordable housing is one of the main challenges facing the real estate sector in Spain. The imbalance between supply and demand has created a situation where housing remains a scarce commodity, especially in large cities such as Madrid.
However, this problem also presents an opportunity for the construction and renovation of a modern, flexible and sustainable residential park.
What is happening with housing in Madrid?
Madrid faces a housing shortage that will persist in the coming years, even with the current public-private projects underway.
According to ASPRIMA, More than 53,000 homes will be needed annually over the next five years, doubling the supply forecast until 2030.
This will result in a cumulative deficit of more than 40,000 homes, meaning that a total of 265,000 units are needed. On the other hand, the INE projects the creation of 246,000 new homes per year in Spain until 2039, with a significant concentration in Madrid and its surrounding area.
This increase in demand, coupled with a lack of supply, continues to drive house prices to record levels.
Affordable housing: a profitable model?
The construction and management of affordable housing has become a profitable investment, if structured properly. Although it presents financial challenges, public incentives can significantly reduce costs and improve the viability of the model.
The key to success lies in the selection of the location, especially in peripheral areas with good infrastructure and accessibility.
The lack of transport and essential services can affect demand, so planning development with connectivity and quality of life criteria has become a fundamental factor.
Keys to the future of affordable housing
The sector faces multiple challenges, including financing, regulation and social acceptance.. However, it offers opportunities such as the revitalisation of peripheral areas, job creation and improved social cohesion.
A key aspect is the coexistence of luxury housing and affordable housing. A inclusive urban planning A balanced approach can ensure that different socioeconomic segments coexist, promoting equitable access to quality public services.
The implementation of inclusion regulations and public-private partnership models can help balance supply without affecting the added value of urban areas.
ESG and its role in affordable housing
Commitment to sustainability and social impact is fundamental to the development of affordable housing. Companies such as Ktesios and AZ Capital are committed to projects with a strong social component, a factor that ensures that investments have a positive impact on the community.
The integration of ESG criteria in property planning improves the sustainability of projects while also generating long-term value.
Investment and leasing models
There are various investment strategies for addressing affordable housing, such as «Build to Rent»the «Senior Coliving» and mixed models.
These approaches allow for risk diversification, maximise returns, and offer stability and profitability to investors.
With regard to rental properties, it is essential to promote an increase in the housing stock. social housing under this scheme. According to the Ministry of Transport, Mobility and Urban Agenda, 5,441 social housing units had been delivered by September 2023, but none were rent-to-buy properties. Promoting this model would help to alleviate the housing crisis.
Public-private partnerships and the change of use of buildings
To address these challenges, collaboration between the public and private sectors is essential in this context.
Developers and investors demand a stable regulatory framework, tax incentives and greater flexibility in administrative procedures. Legal certainty must be balanced with regulatory flexibility to ensure an attractive environment for investment.
Furthermore, converting obsolete buildings into residential properties is an efficient solution for increasing the housing supply. Cities such as Madrid are already working to facilitate the transformation of office buildings into homes.
Towards the future of the sector. The affordable housing market in Spain represents an opportunity to develop profitable and sustainable projects that respond to the growing demand for housing.
With the right approach to planning, investment and public-private partnerships, it is possible to bridge the gap between supply and demand, guarantee access to decent housing and contribute to balanced and sustainable urban development.
Affordable housing in Spain: diagnosis and opportunities
The Ministry of Housing and Urban Agenda (MIVAU) has raised its target for affordable rent, with the creation of more than 184,000 homes through new developments or the refurbishment of non-residential buildings located on public land. This initiative responds to growing pressure on the rental market, especially in large urban centres.
For investors, this scenario represents a strategic opportunity: Working with the government provides access to incentives, land at competitive conditions and responds to a structural demand that continues to grow. The combination of institutional support and strong demand projects the affordable housing segment as one of the most dynamic in 2025.