Spain is still facing the brunt of a huge housing crisis whipped up by high rental costs and a massive social emergency. The current, racially exclusionary rental bubble is incentivizing large property owners to evict their long-time tenants, exacerbating the fight to save our affordable housing. The Sánchez government has acted decisively, enacting a new housing law. This legislation focuses on the most “high-tension” markets across the country where rents have increased the most dramatically.
To address these issues, under this new legislation a Rental Price Cap has been established, leading to a significant drop in rental prices. Since its introduction a year ago, rental prices in Catalonia have reduced by 3.7%. In the case of Barcelona, the decrease is compounded as it represents a 6.4% drop in the overall price of rentals. This new effort takes on the costlier crisis of skyrocketing rents, which have doubled over the last ten years. In stark contrast, wages have barely budged in all those years—up just over 20%.
The situation has sparked widespread protests across various regions, including the Canary Islands and the Balearic Islands. Residents are pushing back on how increasing waves of tourists have driven up the cost of rentals. A growing number of residents say that the ongoing surge in tourists is exacerbating the housing emergency. This population boom further contributes to a major loss in affordable rental stock.
The Housing Ministry is well aware of the urgent need for new homes. They project that Spain will require between 600,000 and one million more units over the next four years to meet surging demand. Within just the last year, demand for housing has increased by 11%. This tidal wave of growth has exposed a tremendous gap between supply and demand.
“There is a lack of housing because homes are being hijacked – on the one hand tourist flats, and on the other hand all the empty flats belonging to vulture funds and the banks.”
Juan Villén, a housing analyst, emphasized the severity of this imbalance:
With more families in the hunt for fewer rental units, the battle has been heightened. Five years ago, nine families were competing for one rental unit. Yet, that number has increased dramatically now, as 54 families compete for every home! This intense competition has pushed rental prices up by a staggering 60% in only five years.
“The current problem is a huge imbalance between supply and demand.”
Communities like Blanca are already bearing the brunt of these rising expenses. She recounted her experience searching for another home:
“Demand is very good, the economy is growing a lot, but supply is dwindling very fast.”
In fact, a significant portion of the city’s residents are being forced out due to lack of affordable housing. Stagnant wage growth and skyrocketing rents are the two biggest drivers. The average rental price in Spain keeps climbing, putting homes out of reach for many families who need decent housing.
Individuals like Blanca are feeling the pinch of these escalating costs. She recounted her experience searching for another home:
“For another home like this [in this area], I’d have to pay double or more what I’m paying now.”
The combination of stagnant wage growth compared to rapidly increasing rents has left many residents struggling to find suitable housing. The average rental price in Spain continues to rise, making it increasingly difficult for families to secure affordable accommodations.