The chief of Spain’s second-biggest bank has issued a stark warning about the country’s property market.
Speaking at the Foro Gran Via in Bilbao last week, BBVA president Carlos Torres said spiralling house prices are a ‘problem of the highest order’, adding that a ‘major housing crisis’ is looming unless drastic action is taken.
Torres called for urgent regulatory reform to speed up the conversion of land into new homes.
He said this was necessary as the country is suffering from a deep structural imbalance between soaring demand and limited construction, a trend he believes will continue pushing prices up at double-digit rates.
Torres dismissed the idea of a new credit-fuelled property bubble, arguing that Spain’s mortgage system remains exceptionally solid.
However, according to Torres, Spain is adding 300,000 new households each year, yet is only building 150,000 to 160,000 homes annually.
This growing deficit, he warned, is causing a persistent mismatch.
‘Every month that passes, the gap between supply and demand widens, and prices keep rising,’ he said.
Meanwhile, immigration continues to fuel demand, making additional supply ‘essential,’ he added.
The BBVA chief said unlocking land and accelerating planning permission is now urgent.
He accused the Spanish system of ‘lacking flexibility’, citing the Madrid Nuevo Norte development which was originally conceived in the 1990s but is still awaiting major construction.
The project’s layout, defined a decade ago, no longer reflects market needs, yet the only way to change it would be to restart a new General Urban Plan, a process that could take 15 to 20 years.
‘If converting land into housing takes two decades, it’s impossible to solve this problem,’ he said.
In better news, Torres said Spain’s economy continues to perform better than expected.
BBVA Research now forecasts Spanish GDP growth close to 3% in 2025 and 2.4% in 2026.
He added that public investment has been boosted by EU funds, partially offsetting the impact of the absence of new national budgets.
Despite positive growth, Torres warned that low productivity threatens long-term prosperity.
He said Spain’s investment in ‘human capital and productive capital’ is lagging behind other economies, resulting in poor productivity growth.
‘Without improvements in productivity, neither income per capita nor overall wellbeing will increase,’ he said.
