Spain's housing crisis leads to snap General Election

Bisi Adebayo (0:02)

Spain's housing crisis sends the country back to the polls. It's World Business Express from the BBC World Service. I am Bissi Adebayo. A major data breach in Denmark exposes the personal details of almost nine million people and the workers helping to train the robots of the future.

Spain's Prime Minister Pedro Sanchez has called an early general election for the 29th of November. His announcement comes after parliament rejected government measures aimed at tackling the country's housing crisis last Friday. In a televised address, Mr. Sanchez, who leads a minority government, said he wanted a broader majority in parliament to push through reforms.

SPEAKER_2 (0:48)

We need to mobilize and secure a broad progressive majority in parliament to overcome resistance from the elites, deliver new social advances and continue transforming Spain.

Bisi Adebayo (0:59)

Now, the decision comes days after tens of thousands of people took to the streets in protest at Spain's housing crisis. And the protest followed the eviction of 87-year-old pensioner Mari Carmen Abascal, who was forced out of her Madrid home last month after being given just 30 minutes to leave. I've been speaking to Professor Marta Soler-Gayat from the University of Barcelona.

Marta Soler-Gayat (1:22)

This case is one case out of thousands of home evictions that are happening every year in Spain. The last day of 2025, we had 25,000 home evictions. So why is this happening now? All the Poles were saying that the bloc who's now supporting the majority in government will lose. And that the Poles were saying the right-wing coalition, they will win. But this protest became big now because the left-wing bloc, they see an opportunity with this.

Bisi Adebayo (1:55)

Now, you say this is part of a wider problem in Spain, but what actually is then driving this problem? Is it simply that Spain hasn't built enough homes or are the landlords pushing the rents too high as well?

Marta Soler-Gayat (2:08)

The problem is that the kind of housing strategies that have been done in Spain up to now, they have had bad consequences. And the problem is that they didn't take into account a basic law in economy. That is that if you reduce the offer, the prices of rent go up, real estate go up. So what happened in the last eight years? There has been little construction of new apartments or new housing, and there have been rent controls, like putting ceilings to the renting, and this has diminished the offer. But at the same time, the demand for rent and for housing has increased. For instance, some people who say that this is due to immigration, this is not true. But also there is more and more demand, not for housing for a big family, but for smaller housing for many different people, like younger people or divorced people, people who want to live alone. So there is more and more demand and less offer.

Bisi Adebayo (3:06)

So obviously we're talking about housing being a major concern for younger voters, but then they don't always turn out in large numbers. So do you think this issue could change that in November?

Marta Soler-Gayat (3:18)

This is happening all the time. Like if you go to May 68 in France, many people think, it was a big protest for the young people. But then the right wing grew after May 68 and the left block was down in votes.

So in the reality, all these mobilizations in terms of votes, if you look at history and past, they don't result in increase to supporting them.

Bisi Adebayo (3:43)

Professor Marta Soler-Geier there.

SPEAKER_4 (3:45)

Tons and they used to. So the prices for moving the goods have gone up significantly for the operators. Fortunately for them, the shipping markets have been favorable to them. So they've been able to pass essentially all of this cost increase across to their customers.

Bisi Adebayo (3:59)

Now let's talk about the euro, which has fallen to its lowest level against the dollar in 17 months. Rachel Winter is partner and investment manager at Kellick & Co. Rachel, how much of this is down to the political uncertainty we're seen in Spain and even France?

Rachel Winter (4:16)

Well, it's definitely a factor. So as you say, the political situation in Spain is uncertain. That makes people less willing to hold euros. We've also got worries about rising debt levels in France. That's also making people less willing to hold euros. But then to add to that, people are more willing to hold the dollar because it looks likely now that US interest rates will rise. And that means people will get a better return on their dollars. We're seeing people selling euros, buying dollars, and that's resulted in a big move in the exchange rate.