Spanish Prime Minister Pedro Sánchez announced the launch of a new investment fund aimed at raising €120 billion (equivalent to $142 billion) to address the country’s worsening housing crisis.
The housing crisis, characterized by rising living costs and a decline in the availability of homes, is considered one of the most urgent issues troubling Spanish citizens and poses a major challenge for a country regarded as one of the world’s developed economies.
The new fund, known as the “Growth of Spain” fund, was first unveiled in January as an initiative designed to compensate for the European aid injected after the COVID-19 pandemic to support Spain’s economic growth in recent years, according to Agence France-Presse.
Sánchez explained that the fund’s financial resources, representing about 7% of Spain’s annual gross domestic product, will come from both public and private sources, with an initial commitment of €10.5 billion from the European Union.
The fund aims to raise up to €23 billion to support housing projects and boost property supply, contributing to the construction of around 15,000 housing units annually. However, a clear timeline for these strategic investments has not yet been specified.
In addition to housing, the fund’s resources will also be directed toward projects in sectors including energy, digitalization, artificial intelligence, and security, as Sánchez announced while presenting the initiative in Madrid.
Tourism remains a key pillar of the Spanish economy, with Spain welcoming 97 million foreign visitors last year. The tourism sector contributes 2.8% to Spain’s gross domestic product, a figure that is nearly double the average recorded across eurozone countries.
However, amid the tourism boom, local residents have expressed frustration over homes designated for tourists, which have driven up rental prices and reduced housing availability. According to a report by the Idealista Group, rental prices per square meter have doubled over the past decade.
