Madrid (AFP) – Spanish Prime Minister Pedro Sanchez on Monday presented a new public investment fund that he said would raise 120 billion euros ($142 billion) and help tackle the country’s persistent housing crisis. Scarce and unaffordable housing is consistently a top concern for Spaniards and represents a stubborn challenge in one of the world’s most dynamic developed economies.
The new “Spain Grows” fund, first announced in January, aims to replace the tens of billions of EU post-Covid recovery aid that helped drive Spain’s strong growth in recent years. Sanchez said the headline figure — representing seven percent of Spain’s annual economic output — would come through public and private sources, with an initial contribution of 10.5 billion euros of EU money.
The fund would “mobilise up to 23 billion euros in public and private funding to dynamise the housing supply” and help build 15,000 homes per year, Sanchez added, without specifying a timeframe for the planned investment. Energy, digitalisation, artificial intelligence and security industries would also benefit from the money, the Socialist leader said at a presentation in Madrid.
Tourism is a key component of Spain’s economy, with the country welcoming a record 97 million foreign visitors last year, when GDP growth reached 2.8 percent — almost double the eurozone average. But locals complain that short-term tourist accommodation has driven up housing prices and dried up supply.
The average price of a square metre for rent has doubled in 10 years, according to online real estate portal Idealista. According to the Bank of Spain, the net creation of new households and a lag in housing construction created a deficit of 700,000 homes between 2021 and 2025.
© 2024 AFP
