Spain’s Housing Crisis Deepens: Rental Market Hit by Soaring Prices and Shrinking Supply

Spain rental market is facing a double whammy with prices soaring by nearly 20% in some hotspots, exacerbating the country's housing crisis.

The rental prices of housing in Spain have surged by 13.2% over the past year, as reported by Idealista. This increase has been consistent, with prices rising by 5% every three months. As of June 2024, the average cost of renting a home in Spain stood at €13.4 per square meter. Every provincial capital in the country has witnessed a rise in rental prices compared to June 2023, with Valencia and Caceres experiencing the highest increases at 19%. Following closely behind are Madrid (17.9%), Palma (17.8%), and Barcelona (17.8%).

Spain's Housing Crisis Deepens: Rental Market Hit by Soaring Prices and Shrinking Supply

In coastal areas, Malaga has seen a significant jump of 16.5% in rental prices over the past year, followed by Alicante at 14.1% and San Sebastián at 11.1%. Among the major markets, Sevilla saw the smallest increase at 6.5%. Barcelona remains the most expensive capital to renting a home in Spain, with prices reaching €22.1 per square meter, followed by Madrid (€19.8 m2) and San Sebastián (€17.6 m2). Palma (€17 m2) and Malaga (€14.5 m2) complete the top five.

On the other end of the spectrum, the most affordable cities for renting are Zamora (€6.5 m2) and Ciudad Real (€6.7 m2). With the exception of Huelva, rental prices have increased in every Spanish province over the past year. The largest increases were seen in Caceres and the Balearic Islands, with prices soaring by 21.6% and 21.5% respectively. Significant increases were also noted in Lugo (19.4%), Girona (18.2%), Valencia (18%), Barcelona (17.7%), and Madrid (17.5%).

Francisco Iñareta, spokesperson for Idealista, criticized the government's housing policies for fueling the price spiral. He highlighted the failure of measures and policies implemented, particularly the Housing Law, which has exacerbated the situation. The sharp increase in prices, especially in high-pressure markets like Valencia, Madrid, Palma, and Barcelona, is a cause for concern.

The rental market in Spain is facing significant challenges, with prices on the rise across the country. Bold measures are needed to address the supply and demand imbalance and restore confidence among property owners.