Recent housing regulations in Spain – limiting annual rent increases to 3 % and restricting revaluation in stressed areas – have produced unexpected effects: more than 30 % of rental properties have been withdrawn from the market, according to sources such as elEconomista.
1. Why are so many floors being removed?
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Limited profitability: Fotocasa points out that by imposing caps on increases, some owners consider that their profit does not compensate for legal restrictions.
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Market stress: In the first quarter of 2023, rental prices rose by 12.2% – the highest rate in 18 years – suggesting that constraints are holding back supply and pushing up prices. .
2. Regulatory context
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The Housing Law in force since 2024 regulates rent increases to 3 % per year in ‘stressed’ areas. .
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In cases where rents are not updated in line with the CPI, these cumulative rents can rise to 5.2%, creating uncertainty.
3. Macroeconomic impact
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EU warns affordable housing shortage could slow Spain’s economic growth
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The government plans to triple public investment in housing (from €2.3 billion to €7 billion) and create a reliable register of property prices
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Owners: They are forced to rethink marketing and possibly opt for sale or holiday use.
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Tenants: They face even tighter supply and high prices, despite restrictions.
5. Proposed solutions
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Tax incentives for affordable rents.
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A real boost to social housing, as demanded by the European Commission
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Transparency of the real estate market, with reliable public data backed by the new state plan
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Balance between regulation, supply and access: rethink legal design to avoid massive withdrawal of rental housing.
Conclusion
Current regulations have weakened the rental supply, making the market more expensive despite their initial intention. There is an urgent need to promote more social housing, encourage tax incentives and improve transparency to achieve a balanced response and prevent the current problem from worsening.
More information and discussion on the blog.
Sources:
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elEconomista.es (09/06/2025)
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Fotocasa
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Relomar (Ley vivienda)
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Homyspace (IRAV)
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Comisión Europea – Cadena SER
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El País / El País Financiero (Brussels, state investment)
