More Than 600,000 Leases Due for Renewal in 2026
As 2026 approaches, Spain’s rental market is reaching a critical milestone: over 600,000 rental contracts signed at the height of the pandemic in 2021 will be up for renewal. For more than 1.5 million families, this means grappling with a dramatic hike in their housing costs—an estimated €1,735 more per year, or roughly €150 extra each month. But in hotspots like the Balearic Islands, the impact soars up to €380 more per month.
Skyrocketing Rents Push Households to the Brink
Over the past five years, rental prices across Spain have surged by 32.5%, with an astonishing 25% jump in just the last two years. According to Fotocasa, the national average price per square meter has climbed from €10.65 to €14.10. This means that a typical 85 m² flat now costs about €1,191 per month—almost €300 more than in 2020.
Spain’s two largest cities, Madrid and Barcelona, are feeling the pinch most acutely, with rents consuming up to 74% of the average net salary—on par with global hotspots like London. The situation is forcing thousands to consider alternatives: moving further from city centers, sharing flats, or even returning to live with their parents.
Rents Hit a Wall—Is the Trend Changing?
While rent growth has dominated the narrative since 2021, recent months show a nuanced picture. Data reveals slight decreases in some city districts, such as Barajas and Villa de Vallecas in Madrid, and select neighborhoods in Barcelona (Horta-Guinardó and Sarrià-Sant Gervasi). At the national level, annual rent hikes fell from a staggering 14% (late 2024) to around 7.4% in 2025—a signal the market may be peaking in high-demand areas. Still, in less dynamic regions, double-digit annual increases persist.
What’s Next for 2026?
Looking forward, experts predict continued but slower rental price increases—around 12%—especially in undersupplied regions and secondary cities. Supply remains tight as some rental stock is diverted to other uses, while strong demand endures.
Households Forced to Rethink Housing Plans
Record rents are prompting families to explore buying a home. In fact, the share of tenants considering homeownership climbed from 48% to 53% in a single year. Yet, for most, purchase prices and strict lending criteria remain a barrier: Spanish banks typically require at least 20% down, plus another 10% to cover taxes and fees. For a €300,000 home, that’s around €90,000 just to get started—a sum out of reach for many.
Unable to buy, more households are moving to cheaper, peripheral areas, downsizing, or sharing accommodations. In just a year, the proportion of people sharing with more than four others jumped from 6% to 14%, and 50% of Spain’s flat-sharers do so purely out of financial necessity. Only 15.2% of Spanish young people now live independently—the lowest share recorded since 2006.
A Generation Left Behind
With the average rent now at €1,080 per month (up 11.6% year-on-year), a young Spaniard earns just enough to barely cover rent if living alone—92.3% of their salary would be eaten by housing costs. Homeownership is equally daunting, requiring 14 years’ salary and four years just for the deposit.
2026 Brings No Relief for Spain’s Rentals
As more than 600,000 contracts reset in 2026, Spain’s rental crisis shows little sign of easing. While rapid price growth may be slowing in some areas, the fundamental imbalance between demand and supply persists, keeping both rents and barriers to independence painfully high. For many, whether it’s buying, sharing, or moving home, the search for affordable housing remains a daunting challenge.
