Spain will spend around 1.3 billion euros of EU funds over the next 10 years on industrial projects to build badly-needed social housing amid soaring property prices and rents, Prime Minister Pedro Sánchez has said.
The announcement came at a business event in Madrid on Thursday – ‘Towards Industrialised Construction’, the 8th edition of the REBUILD fair for the building and construction sector. Spain’s Minister of Industry and Tourism, Jordi Hereu, and the Minister of Housing and Urban Agenda, Isabel Rodríguez, also attended the event.
The plan is to offer some 15,000 new homes per year, cutting construction times by up to 60%, and ultimately reducing an estimated shortage of 600,000 homes, Sánchez said.
Less than 5% of the homes in Spain are built using industrial methods, where a large part of a building is produced at factories and then assembled at construction sites, whereas elsewhere in Europe it is much higher. Industrial construction is often referred to as prefabricated – or ‘prefab’ – properties, or ‘modular homes’.
Sánchez said there was a need for a ‘genuine paradigm shift within the construction sector’, focusing on its industrialisation, digitalisation, and sustainability, with three main goals: ‘to build more and better housing, to build faster, and at more affordable prices’.
He said that it was time for Spain ‘to move decisively towards an industrialised model of construction’, as it would help to reduce direct impacts such as waste and CO2 emissions while also improving working conditions.
He said that in the face of this ‘unprecedented challenge’ for the construction sector, his government was launching a new Strategic Project for Economic Recovery and Transformation (PERTE) focused on the ‘Industrialisation of Housing’. The initiative would involve a public investment of 1.3 billion euros over 10 years, through financial instruments designed to also attract private investment.
‘We are launching this PERTE because industrialised construction is a priority, and we have significant room for improvement in this area,’ he said, noting that the use of modern construction methods in Spain accounts for less than 5% of the sector, according to the most recent estimates, compared to 20% in Germany and the Netherlands, and 10% in the United Kingdom.
Although Spain is expected to double that figure by 2030, the prime minister urged that ‘we must become leaders in this field’. He also reiterated his call for parliamentary groups to support the draft Land Act in Congress, ‘a necessary law, agreed upon with the sector, aimed at curbing land prices and providing legal certainty to market operators’.
Shortages in affordable housing have triggered waves of protests across Spanish cities as rents double and house prices rose by 44% since 2020, according to the Idealista property website. ALSO READ: Tens of thousands march across Spain to protest the growing housing crisis.
The socialist (PSOE) led coalition government is also promoting rent controls in the largest cities and trying to limit short-term rentals to tourists and foreigners, while encouraging the construction of more social housing, which accounts for just 3% of all available houses, well below the European average of 9%.
Sánchez said that the eastern area of Valencia, which last October was hit by the deadliest flash floods in Spain’s modern history, would be the first hub for industrial construction projects, without specifying how many houses would be built there.
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Lanzamos el PERTE de la Industrialización de la Vivienda con una inversión pública de 1.300 M€ en 10 años.
Una herramienta fundamental para situar a España a la vanguardia. Tenemos las empresas y la ambición.
Construiremos más y mejor vivienda, más rápido y más asequible. pic.twitter.com/6cW6YKG3dI
— Pedro Sánchez (@sanchezcastejon) April 24, 2025
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