Critical situation of the rental market in Spain: prices at all-time highs and supply in freefall

The rental market in Spain is going through a period of maximum tension. According to El Economista, at the end of June prices reached an average of 14.38 €/m², making a string of eight consecutive months of double-digit rises, indicating an ‘unprecedented supply crisis’.

An unstoppable escalation

• The Secure Rental Institute and the URJC report an average of €1,155/month, the highest in recent years.

• Idealista confirms an increase of 9.7% year-on-year and a quarterly increase of 4.4%, bringing the price to 14.6 €/m².

• Malaga is the sixth most expensive province to live in for renting, with an average of 1,272 €, while Andalusia reaches 932 €/month.

Structural factors putting pressure on the market

1. Insufficient supply: A shrinking rental housing stock, low public investment and legal uncertainty have discouraged owners and developers.

2. Urban and land problems: The growth in demand is not matched by the necessary urban development. There are between 450,000 and 600,000 fewer dwellings than would be needed, according to different sources.

3. Tourism and investment pressure: The tourist flat boom and speculative investment are taking residential units out of the traditional market.

Socio-economic context

• Rents have risen by 95% in the last decade, compared to a wage increase of only 33%.

• The Bank of Spain estimates that more than 40 % of tenants spend more than 40 % of their income on rent.

• Cities such as Madrid and Barcelona are experiencing citizen mobilisations and protests against the impossibility of accessing decent housing.

Institutional responses and their limited effectiveness

• The government has promoted measures such as price controls in stressed areas, rental subsidies or the regulation of tourist rentals, but with little real impact as there is only 1.5% of public stock compared to 9% in Europe.

• Brussels urges Spain to speed up licences, free up land and prioritise social housing to guarantee territorial cohesion and economic sustainability.

What are the implications for tenants and investors?

• Tenants and families: Affordable housing has become an increasingly difficult mission.

• Investors: In areas with high demand, yields remain stable, provided that the regulations and context of each city are well analysed.

• Private landlords: They have the opportunity to fill a key niche, with high demand and more secure and profitable professionalised leasing formulas.