Foreclosures, Housing Rights and Prevention of Homelessness in Spain

 

Over the last 30 years there have been several speculative bubbles in the Spanish housing sector. The first boom took place in the early 1970s, when 500,000 houses per

year were built until the oil crisis of 1973. This growth was not overly excessive, since the “secular shortage” of housing since the post-war period was being addressed,

combined with the migratory waves from the rural areas to the cities resulting from industrialization processes and the demographic growth during that period. The second

upward cycle in the housing sector occurred in the 1980s.

This rise was based on the increase in housing prices and not on production, with less than 400,000 housing starts per year. In the cycle that lasted from 1998 to 2007, however, not only did housing prices skyrocket beyond the housing boom of the 1980s, but the rate of housing starts also exceeded the production levels of the 1970s. Consequently, the latest economic cycle was characterized by spectacular price hikes that surprised everyone not only because of their scale, but also because of the duration of

the boom, which lasted almost ten years.2 This was due to different reasons, including declining interest rates, laxer mortgage lending conditions, real-estate speculation and foreign investment in Spain. Housing starts topped 600,000 units per year in 2001, reaching 800,000 units by 2005. This was more than France, Germany and the UK combined. Nevertheless, in spite of these hair-raising figures, in 2001 the rental market accounted for only 11% compared to 82% who were homeowners. In 2001 a total

of 3,106,422 houses were empty, 25.5% more than in 1991.

Moreover, social housing in Spain accounts for 11% of the market versus the European average of 16%, but when we speak of social housing for rent, Spain has 3 social

housing units for rent per 1,000 inhabitants, while the EU-27 average is 39 per 1,000.