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President of the Government Pedro Sánchez has announced a major new fund designed to pump billions into Spain's struggling housing market and help bring down soaring prices.

 

The España Crece (Spain Grows) scheme will mobilise €23 billion annually through a mix of public and private investment, with the aim of delivering an extra 15,000 homes every year. The President said the initiative would "boost housing supply" and make real progress towards solving the country's chronic shortage.

 

President Sánchez insisted the fund would encourage private investors to build homes for ordinary people rather than simply profiting from what he called a "constitutional right". The scheme will be managed by the Official Credit Institute (ICO) and should be up and running by the second quarter of this year.

 

The government is putting €13.3 billion of EU Recovery Plan loans into the pot as seed capital. Unlike the Next Generation EU funds, which run out this year, España Crece will operate permanently without any fixed deadline for spending the money.

 

Around €2 billion of the initial injection will go towards housing, allowing the ICO to leverage €14 billion for the sector. The remaining €9 billion is expected to come from private investors attracted by the public bank's involvement, according to Ministry of Economy sources.

 

Economy Minister Carlos Cuerpo described it as a "powerful tool" that would support companies with innovative projects and help them grow throughout their lifecycle. The broader fund aims to mobilise up to €120 billion in total across nine key areas including housing, energy, digitalisation, AI and infrastructure.

 

Minister for Housing Isabel Rodríguez said the initiative would help Spain catch up with its European neighbours on public housing stock, an area where the country has historically lagged behind. She added that the fund represents a chance to turn Spain's current economic growth into tangible improvements for so many poeople struggling to afford homes.